Question

Hadley Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price $ 126
Units in beginning inventory 0
Units produced 1,900
Units sold 1,800
Units in ending inventory 100

Variable costs per unit:
Direct materials $ 49
Direct labor $ 28
Variable manufacturing overhead $ 5
Variable selling and administrative expense $ 11

Fixed costs:
Fixed manufacturing overhead $ 32,300
Fixed selling and administrative expense $ 23,400

What is the unit product cost for the month under variable costing?

$99 per unit
$110 per unit
$82 per unit
$93 per unit

Answer 1

Answer:

Unit cost 82

Explanation:

Vaiable cost per unit:

materials 49

Labor 28

Variable OH 5

Unit cost 82

The variable selling and administrative expense will be listed in the income statemnt as part of the variables cost to determinate the contribution, but it is not part of the production cost, it doesn't activate through inventory.