A manufacturing company that produces a single product has provided the followin

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                                                            7,000

Units sold                                                                                6,900

Units in ending inventory                                                            100

Variable costs per unit

Direct materials                                                                $46

Direct labor                                                                      $41

Variable manufacturing overhead                                      $4

Variable selling and administrative expense                       $9

Fixed costs per year:

Fixed manufacturing overhead                     $210,000

Fixed selling and administrative expense                   $75,900


  

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

Explanation / Answer

Statement showing computations Particulars Amount Direct Materials = 6,900 * 46    317,400.00 Direct Labour = 6,900 * 41    282,900.00 Variable Manufacturing Overhead = 6,900 * 4      27,600.00 Total Variable product Cost    627,900.00 Variable costing unit product cost = 627,900/6,900              91.00 Note: Selling and administrative expenses (both variable and fixed) are not relevant for the computation of unit product cost.

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