Question

Aqua​ Primavera, Inc. has provided the following information for the year. Units produced ​11,000 units Sales price ​$500 per unit Direct materials ​$45 per unit Direct labor ​$30 per unit Variable manufacturing overhead ​$55 per unit Fixed manufacturing overhead ​$480,000 per year Variable selling and administration costs ​$75 per unit Fixed selling and administration costs ​$300,000 per year What is the unit product cost using variable​ costing?

Answer 1

Answer:

$130

Explanation:

In this question, we are asked to calculate unit product cost using variable costing.

The variable costing here includes cost of direct materials, cost of direct labor and cost of variable manufacturing overhead.

Mathematically it can be expressed as follows: Unit product cost = cost of direct materials + cost of direct labor + cost of variable manufacturing overhead = 45 + 30 + 55 = $130