Question

XYZ Company manufactures several different products. Unit costs associated with Product ABC are as follows: Direct materials $87 Direct manufacturing labor 42 Variable manufacturing overhead 26 Fixed manufacturing overhead 35 Sales commissions (2% of sales) 16 Administrative salaries 19 Total $225 The percentage of the total variable costs per unit associated with Product ABC with respect to total cost is closest to

Answer 1

Answer:

76%

Explanation:

Variable cost per unit = Direct material + Direct manufacturing labor + Variable manufacturing overhead + sales commission

Variable cost per unit = $87 + $42 + $26 + $16

Variable cost per unit = $171

Total cost per unit = $225

% variable cost per unit to Total cost per unit = Variable cost per unit / Total cost per unit = $171 / $225 = 0.76 = 76%

So, the percentage of the total variable costs per unit associated with Product ABC with respect to total cost is closest to 76%.