Vijay Company reports the following information regarding its production costs. Direct materials $ 10 per unit Direct labor $ 20 per unit Overhead costs for the year Variable overhead $ 10 per unit Fixed overhead $ 160,000 Units produced 20,000 unitsCompute the production cost per unit under variable costing.

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Spud

Business

25 September, 06:27

Vijay Company reports the following information regarding its production costs. Direct materials $ 10 per unit Direct labor $ 20 per unit Overhead costs for the year Variable overhead $ 10 per unit Fixed overhead $ 160,000 Units produced 20,000 unitsCompute the production cost per unit under variable costing.

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Addisyn Pittman · Answer 1

Unitary variable cost = $40

Total variable cost = $800,000

Explanation:

Giving the following information:

Direct materials $ 10 per unit

Direct labor $ 20 per unit

Overhead costs for the year Variable overhead $ 10 per unit

Fixed overhead $ 160,000

Units produced 20,000 units

Unitary variable cost = direct material + direct labor + manufacturing overhead = 10 + 20 + 10 = $40

Total variable cost = 20000units * 40 = $800,000