The estimated unit costs for a company to produce and sell a product at a level of 13,500 units per month are as follows:

Cost Item Estimated

Unit Cost

Direct material $ 34

Direct labor 22

Variable manufacturing

overhead 19

Fixed manufacturing

overhead 6

Variable selling

expenses 4

Fixed selling expenses 5

What are the estimated variable costs per unit?

The correct answer is $79.

Explanation:

According to the scenario, the computation of the given data are as follows:

We can calculate the estimated variable cost by using following formula:

Estimated variable cost = Direct material + Direct labor + Variable manufacturing overhead + Variable selling expenses

By putting the following value in the formula, we get

Estimated variable cost = $34 + $22 + $19 + $4

= $79

Hence, the estimated variable costs per unit is $79.