Question

Question 1) Schwiesow Corporation has provided the following information: Cost per Unit Cost per Period Direct materials $ 7.05 Direct labor $ 3.50 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 11,000 Sales commissions $ 1.00 Variable administrative expense $ 0.40 Fixed selling and administrative expense $ 5,500 If 4,000 units are sold, the variable cost per unit sold is closest to:

• $16.90

• $13.60

• $12.20

• $14.40

Question 2

Schwiesow Corporation has provided the following information:

	Cost per Unit		Cost per Period
Direct materials	$	7.05
Direct labor	$	3.50
Variable manufacturing overhead	$	1.65
Fixed manufacturing overhead			$	11,000
Sales commissions	$	1.00
Variable administrative expense	$	0.40
Fixed selling and administrative expense			$	5,500

If 4,000 units are sold, the total variable cost is closest to:

• $67,600

• $54,400

• $48,800

• $57,600

Answer 1

Answer of Question 1:

Variable Cost per unit = Direct Material + Direct Labor + Variable Manufacturing Overhead + Sales Commission + Variable Administrative Expense
Variable Cost per unit = $7.05 + $3.50 + $1.65 + $1 + $0.40
Variable Cost per unit = $13.60

Answer of Question 2: The correct answer is $54,400

Variable Cost per unit = Direct Material + Direct Labor + Variable Manufacturing Overhead + Sales Commission + Variable Administrative Expense
Variable Cost per unit = $7.05 + $3.50 + $1.65 + $1 + $0.40
Variable Cost per unit = $13.60

Variable Cost = Variable Cost per unit * No. of Units
Variable Cost = $13.60 * 4,000
Variable Cost = $54,400