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13 October, 22:18

Paolucci Corporation's relevant range of activity is 8,400 units to 17,000 units. When it produces and sells 12,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 7.10 Direct labor $ 4.00 Variable manufacturing overhead $ 2.00 Fixed manufacturing overhead $ 3.60 Fixed selling expense $ 1.30 Fixed administrative expense $ 0.60 Sales commissions $ 1.25 Variable administrative expense $ 0.50 If 11,700 units are sold, the variable cost per unit sold is closest to:

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  1. 13 October, 22:31
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    The variable cost per unit sold is closest to $14.85

    Explanation:

    In order to calculate the variable cost per unit sold we would have to use the following formula:

    Total variable cost per unit = (Direct materials+Direct labor+Variable manufacturing overheads+Sales commissions+Variable adminsitrative expenses)

    Therefore, Total variable cost per unit=$7.10+$4.00+$2.00+$1.25+$0.50

    Total variable cost per unit=$14.85

    The variable cost per unit sold is closest to $14.85
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