Tat Corporation produces a single product and has the following cost structure:





Number of units produced each year 7,000
Variable costs per unit:
Direct materials $ 77
Direct labor $ 89
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 3
Fixed costs:
Fixed manufacturing overhead $ 532,000
Fixed selling and administrative expense $ 574,000


The unit product cost under absorption costing is:
$332 per unit
$166 per unit
$171 per unit
$247 per unit