Question

Chance, Inc. sold 4,300 units of its product at a price of $137 per unit. Total variable cost per unit is $103, consisting of $71 in variable production cost and $32 in variable selling and administrative cost. Compute the manufacturing margin for the company under variable costing.a. $346,500 b. $499,500 c. $315,000 d. $661,500 e. $337,500

Answer 1

Answer:

Results are below.

Explanation:

The variable costing method incorporates all variable production costs (direct material, direct labor, and variable overhead).

Unit product cost= direct material + direct labor + variable overhead

Unit product cost= $71

Now, the total sales and total variable cost:

Total sales= 4,300*137= $589,100

Total variable cost= 4,300*71= $305,300

Finally, the variable costing margin:

Variable costing margin= total sales - total variable cost

Variable costing margin= 589,100 - 305,300

Variable costing margin= $283,800