Question

Puritan Apparels is a clothing retailer. Unit costs associated with one of its products, Product DCF 130, are as follows:

                              Direct materials                                     $120

                              Direct manufacturing labor                    40

                              Variable manufacturing overhead        15

                              Fixed manufacturing overhead              33

                              Sales commissions (2% of sales)               5

                              Administrative salaries                            24

                                      Total                                                 $237

What are the indirect nonmanufacturing variable costs per unit associated with Product DCF130?

Question 3 options:

	$160
	$5
	$213
	$29

Answer 1

Out of the costs given in the question, only sales commission is the indirect non manufacturing variable cost.

indirect non manufacturing variable cost per unit = Sales commission

= $5

Direct materials, direct manufacturing labor, Variable manufacturing overhead and Fixed manufacturing overhead are manufacturing costs.

Administrative salaries is a non manufacturing cost but it is fixed in nature.

Second option is correct option.

Kindly comment if you need further assistance.

Thanks‼!