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		4,200
Units sold		4,100
Units in ending inventory		100
Variable costs per unit:
Direct materials	$	45
Direct labor	$	47
Variable manufacturing overhead	$	10
Variable selling and administrative expense	$	8
Fixed costs:
Fixed manufacturing overhead	$	88,200
Fixed selling and administrative expense	$	41,000

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

• $110 per unit

• $131 per unit

• $102 per unit

• $119 per unit

Answer 1

In variable costing method, variable costing unit product cost includes only Variable Manufacturing Costs. It does not include Fixed costs, selling and administrative expense.

Calculation of variable costing unit product cost

Particulars	Per Unit Cost
Direct Materials	$45
Direct Labor	$47
Variable manufacturing overhead	$10
variable costing unit product cost (total of Above	$102

Hence variable costing unit product cost is $102 per unit is the Right Answer