Mallard Corporation uses the product cost concept of product

Mallard Corporation uses the product cost concept of product pricing. Below is cost information for the production and sale of 45,000 units of its sole product. Mallard desires a profit equal to a 12% rate of return on invested assets of $800,000. Fixed factory overhead cost Fixed selling and administrative costs Variable direct materials cost per unit Variable direct labor cost per unit Variable factory overhead cost per unit Variable selling and administrative cost per unit $82,000 45,000 5.50 7.65 2.25 0.90 The cost per unit for the production of the company\'s product is Oa. $17.22 Ob. $13.15 ??. $15.75 X d. $15.40

Solution

Answer is option a.$17.22

Calculation of cost per unit of production.

Fixed factory overhead (82000/45000) 1.82
Variable material cost 5.50
Variable labor cost 7.65
Variable factory overhead 2.25

Total cost per unit 17.22

Note:- Both fixed and variable selling & administration overhead doesn\'t form part of production cost.