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A company reports the following information for its first year of operations: Units produced this year...

A company reports the following information for its first year of operations: Units produced this year 650 units Units sold this year 500 units Direct materials $750 per unit Direct labor $1,000 per unit Variable overhead ? in total Fixed overhead $308,750 in total If the company's cost per unit of finished goods using variable costing is $2,375, what is total variable overhead? $237,500 $75,000 $312,500 $406,250 $97,500

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Answer #1
Total cost per unit           2,375
Less: Material cost per unit             (750)
Less: labor cost per unit         (1,000)
variable overhead cost per unit               625
Multiplied by no. of units prodcued               650
Total variable overhead       406,250
Correct Option $406,250
Note: Under variable costing fixed overhead is not treated as product cost. It is period cost.
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