Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$119 Units in beginning inventory 0 Units produced 6,550 Units sold 6,250 Units in ending inventory 300 Variable costs per unit: Direct materials$17 Direct labor$47 Variable manufacturing overhead$11 Variable selling and administrative expense$11 Fixed costs: Fixed manufacturing overhead$176,850 Fixed selling and administrative expense$25,500 What is the unit product cost for the month under variable costing

Question

Melany Krause

Business

22 July, 11:37

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price$119 Units in beginning inventory 0 Units produced 6,550 Units sold 6,250 Units in ending inventory 300 Variable costs per unit: Direct materials$17 Direct labor$47 Variable manufacturing overhead$11 Variable selling and administrative expense$11 Fixed costs: Fixed manufacturing overhead$176,850 Fixed selling and administrative expense$25,500 What is the unit product cost for the month under variable costing

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Kaylee Hutchinson · Answer 1

Product cost = $75

Explanation:

Giving the following information:

Variable costs per unit:

Direct materials $17

Direct labor $47

Variable manufacturing overhead $11

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

Product cost = 17 + 47 + 11 = $75