Question

Dillon Company incurred the following costs while producing 480 units: direct materials, $9 per unit; direct labor, $22 per unit; variable manufacturing overhead, 12 per unit; total fixed manufacturing overhead costs, $7,680; variable selling and administrative costs, $4 per unit; total fixed selling and administrative costs, $4,320. There are no beginning inventories.

What is the unit product cost using variable costing?
A. $72 per unit
B. $59 per unit
C. $47 per unit
D. $43 per unit

Answer 1

The unit cost is $43 per unit

Step-by-step explanation:

Required

Determine the unit product cost?

Using variable costing, the unit product cost is:

`Unit = DM+ DL + VMO`

`DM = Direct\ Materials =\$9`

`DL = Direct\ Labor =\$22`

`VMO = Variable\ Manufacturing\ Overhead = \$12`

So, we have:

`Unit = \$9 + \$22 + \$12`

`Unit = \$43`

Hence, the unit cost is $43 per unit