Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 163 Units in beginning inventory 0 Units produced 7,100 Units sold 6,800 Units in ending inventory 300 Variable costs per unit: Direct materials $ 28 Direct labor $ 58 Variable manufacturing overhead $ 22 Variable selling and administrative expense $ 22 Fixed costs: Fixed manufacturing overhead $ 191,700 Fixed selling and administrative expense $ 28,800 What is the unit product cost for the month under variable costing?

Question

Allan Farmer

Business

23 February, 23:58

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 163 Units in beginning inventory 0 Units produced 7,100 Units sold 6,800 Units in ending inventory 300 Variable costs per unit: Direct materials $ 28 Direct labor $ 58 Variable manufacturing overhead $ 22 Variable selling and administrative expense $ 22 Fixed costs: Fixed manufacturing overhead $ 191,700 Fixed selling and administrative expense $ 28,800 What is the unit product cost for the month under variable costing?

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Travis Hanson · Answer 1

Unitary cost = $108

Explanation:

Giving the following information:

Direct materials = $28

Direct labor = $58

Variable manufacturing overhead = $22

Under the variable costing method, the unitary product cost is calculated using direct material, direct labor, and variable overhead.

Unitary cost = 28 + 58 + 22 = $108