Question

During January, Lang, Inc. produced 10,000 units of product with costs as follows: Direct materials $...

During January, Lang, Inc. produced 10,000 units of product with costs as follows:

Direct materials $ 40,000
Direct labor 22,000
Variable overhead 10,000
Fixed overhead 90,000
$ 162,000

What is Lang's unit cost for January, calculated on the variable costing basis?

Multiple Choice

  • $7.20.

  • $8.50.

  • $6.20.

  • $7.50.

  • $9.50.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Total cost under variable costing will be as follows:

Direct Materials $40,000

Direct Labour $22,000

Variable OH $10,000

Total Variable cost = $72,000

Total Units produced = 10000

Variable cost per unit would be = Total Variable Cost / Total Units produced

= $72,000 / 10000 = $7.20 - Answer Option A

Note: Fixed OH is not considered in the calculation because we're following variable costing method. And fixed cost is not variable in nature and doesn't change as per the units produced. They remain the same irrespective of the production unless there is any significant change in production capacity.

Please like the answer - if it was helpful. I am trying my best to help you - it keeps me motivated.

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials,...
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $2 per unit, Variable overhead, $4 per unit, and Fixed overhead, $324,000. The company produced 36,000 units, and sold 28,500 units, leaving 7,500 units in inventory at year-end. Income calculated under variable costing is determined to be $400,000. How much income is reported under absorption costing? Multiple Choice $400,000 $332,500 $724,000 $467,500 $381,000 Urban Company reports the following information...
Assume the following information for a company that produced 10,000 units and sold 9,000 units during...
Assume the following information for a company that produced 10,000 units and sold 9,000 units during its first year of operations: Per Unit Per Year Selling price $ 200 Direct materials $ 80 Direct labor $ 50 Variable manufacturing overhead $ 10 Sales commission $ 8 Fixed manufacturing overhead $ 295,000 Which of the following choices explains the relationship between the absorption costing net operating income and the variable costing net operating income? Multiple Choice The absorption costing net operating...
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials,...
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $290,000. The company produced 29,000 units, and sold 19,500 units, leaving 9,500 units in inventory at year-end. Income calculated under variable costing is determined to be $365,000. How much income is reported under absorption costing? Multiple Choice $365,000 $460,000 $329,000 $655,000 $270,000 Jeter Corporation had net income of...
Hayes Inc. provided the following information for the current year: Beginning inventory 300 units Units produced...
Hayes Inc. provided the following information for the current year: Beginning inventory 300 units Units produced 950 units Units sold 994 units Selling price $ 350 /unit Direct materials $ 55 /unit Direct labor $ 36 /unit Variable manufacturing overhead $ 35 /unit Fixed manufacturing overhead $ 49,400 /year Variable selling/administrative costs $ 28 /unit Fixed selling/administrative costs $ 35,500 /year What is the unit product cost for the year using variable costing? Multiple Choice $178 $126 $154 $228 $228...
Hayes Inc. provided the following information for the current year: Beginning inventory 180 units Units produced...
Hayes Inc. provided the following information for the current year: Beginning inventory 180 units Units produced 830 units Units sold 876 units Selling price $ 230 /unit Direct materials $ 43 /unit Direct labor $ 24 /unit Variable manufacturing overhead $ 23 /unit Fixed manufacturing overhead $ 33,200 /yr Variable selling/administrative costs $ 16 /unit Fixed selling/administrative costs $ 23,500 /yr What is the unit product cost for the year using variable costing? Multiple Choice $130 $90 $106 $168
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates...
Haylock Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 7,400 direct labor-hours will be required in August. The variable overhead rate is $1.60 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $100,400 per month, which includes depreciation of $8,950. All other fixed manufacturing overhead costs represent current cash flows. The August cash disbursements for manufacturing overhead on the manufacturing overhead budget should be: Multiple Choice $11,840 $103,290 $112,240 $91,450 3....
Reiver Inc makes paving materials for highways. Production and cost data for January 2018, the first...
Reiver Inc makes paving materials for highways. Production and cost data for January 2018, the first month of operations are as follows: Units started in January 90,000 tons Units completed and transferred to finished goods 80,000 tons Machine hours operated 8000 Cost of direct materials $ 495,000 Cost of direct labor $ 393,550 All direct materials are added at the start of the process for every unit produced and the labor and manufacturing overhead are added evenly throughout the process....
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials,...
During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $6 per unit, Direct labor, $3 per unit, Variable overhead, $5 per unit, and Fixed overhead, $296,000. The company produced 37,000 units, and sold 29,000 units, leaving 8,000 units in inventory at year-end. Income calculated under variable costing is determined to be $405,000. How much income is reported under absorption costing?
ABC Co. sells its product for $60 per unit. During 2019, it produced 70,000 units and...
ABC Co. sells its product for $60 per unit. During 2019, it produced 70,000 units and sold 60,000 units (there was no beginning inventory). Costs per unit are: direct materials $14, direct labor $8, and variable manufacturing overhead $3. Fixed costs are: $721,000 manufacturing overhead, and $90,000 selling and administrative expenses Cost of goods sold under absorption costing is?
Spooky Corporation had planned to produce 50,000 units of product during the first quarter of the...
Spooky Corporation had planned to produce 50,000 units of product during the first quarter of the current year. The company prepared the following budget on May 1: Budgeted (50,000 units) Variable costs: Direct materials used $ 36,000 Direct labor 45,000 Variable overhead 22,500 Fixed costs: Manufacturing overhead 58,500 Total manufacturing costs $ 162,000 During the first quarter, Spooky produced 60,000 units and incurred total manufacturing costs of $184,000. 1. Which of the following amounts should not be included in Spooky's...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT