Question

Given the following data, calculate the total product cost per unit under variable costing. Direct labor $ 3.50 per unit Direct materials $ 1.25 per unit Overhead Total variable overhead $ 41,400 Total fixed overhead $ 150,000 Expected units to be produced 18,000 units

Answer 1

Answer:

$7.05

Explanation:

Given that

Direct labor = $3.50 per unit

Direct material = $1.25 per unit

Variable overhead = $41,400

Total fixed overhead = $150,000

Produced units = 18,000

The computation of total product cost per unit under variable costing is shown below:-

Total Variable overhead = Variable overhead ÷ Produced units

= $41,400 ÷ $18,000

= $2.3

Total product cost per unit = Direct labor + Direct material + Total variable overhead

= $3.50 + $1.25 + $2.3

= $7.05