Question

Given the following data, calculate product cost per unit under variable costing.

Direct labor $8 per unit
Direct materials $3 per unit
Overhead
Total variable overhead $30,000
Total fixed overhead $85,000
Expected units to be produced 50,000 units

a. $7 per unit
b. $13.30 per unit
c. $11.00 per unit
d. $11.60 per unit
e. $16.50 per unit

Answer 1

$13.30 unit

Step-by-step explanation:

Direct labor $8 per unit

Direct materials $3 per unit

Overhead

Total variable overhead $30,000

Total fixed overhead $85,000

Expected units to be produced 50,000 units

Total Direct labor = $8 x 50,000 units = $400,000

Total Direct materials = $3 x 50,000 units = $150,000

Total Cost = 400,000 + 150,000 + 85,000 + 30,000 = $665,000

Total cost per unit = $665,000 / 50,000 units = $13.30 unit