Question

A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:
Units in beginning inventory 0
Units produced 8,900
Units sold 8,500
Units in ending inventory 400
Variable costs per unit:
Direct materials $ 26
Direct labor $ 25
Variable manufacturing overhead $ 4
Variable selling and administrative expense $ 4
Fixed costs:
Fixed manufacturing overhead $ 249,200
Fixed selling and administrative expense $ 17,000

What is the variable costing unit product cost for the month?

a. $59 per unit

b. $55 per unit

c. $87 per unit

Answer 1

Answer:

The correct answer is B.

Explanation:

Giving the following information:

Variable costs per unit:

Direct materials $ 26

Direct labor $ 25

Variable manufacturing overhead $ 4

Variable selling and administrative expense $ 4

Under the variable cost method, the unitary cost of production is calculated as:

Unitary variable cost= direct material + direct labor + variable overhead

Unitary VC= 26 + 25 + 4= $55