Aqua Primavera, Inc. has provided the following information for the year. Units produced 6 comma 000 units Sales price $ 200 per unit Direct materials $ 30 per unit Direct labor $ 45 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 470 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 270 comma 000 per year What is the unit product cost using variable costing?

Question

Tia Middleton

Business

5 January, 00:39

Aqua Primavera, Inc. has provided the following information for the year. Units produced 6 comma 000 units Sales price $ 200 per unit Direct materials $ 30 per unit Direct labor $ 45 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 470 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 270 comma 000 per year What is the unit product cost using variable costing?

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Answers (1)

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Tripp · Answer 1

Unit product cost = $95

Explanation:

Giving the following information:

Direct materials $30 per unit

Direct labor $45 per unit

Variable manufacturing overhead $20 per unit

Under the variable costing method, the unit product cost is calculated using the direct material, direct labor, and variable manufacturing overhead:

Unit product cost = 30 + 45 + 20 = $95