$420 Selling price per fireplace Manufacturing costs: Variable per unit produced

Question

$420 Selling price per fireplace Manufacturing costs: Variable per unit produced: $135 $43 $37 $210,000 Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead per year Selling and administrative expenses: $45 $190,000 Variable per unit sold Fixed per year Units in beginning inventory Units produced during the year Units sold during the year 0 5,000 4,500 Use the data to answer the following 1. Assume the company uses variable costing: Compute the unit product cost for one fireplace

Explanation / Answer

Unit Product cost for one fireplace is $257 as calculated below:

Cost of goods sold: Per unit Cost Total Cost of sales    Direct Material 4,500 135.00 607,500    Direct Labour 4,500 43.00 193,500    Variable manufacturing overhead 4,500 37.00 166,500    Annual fixed manufacturing overhead 4,500 42.00 189,000 Unit Product Cost 257.00 1,156,500

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