Maffei Company, which has only one product, has provided the following data conc

Question

Maffei Company, which has only one product, has provided the following data concerning its most recent month of operations:
Selling price $ 175

Units in beginning inventory 0
Units produced 9,500
Units sold 8,000
Units in ending Inventory 1,500

Variable costs per unit:
Direct materials $ 55
Direct labor $ 38
Variable manufacturing overhead $ 2
Variable selling and admin $ 10

Fixed costs:
Fixed manufacturing overhead $ 300,000
Fixed selling and admin $ 125,000
Required:
a. What is the unit product cost for the month under variable costing?

Explanation / Answer

unit product cost for the month under variable costing = 55+38+2+10 = $105/unit as 9500 units are produced in the month so total cost will be = 9500*105 = $997500

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