Question

Paolucci Corporation's relevant range of activity is 6,900 units to 14,500 units. When it produces and sells 10,700 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.85 Direct labor $ 3.75 Variable manufacturing overhead $ 1.75 Fixed manufacturing overhead $ 3.30 Fixed selling expense $ 1.05 Fixed administrative expense $ 0.75 Sales commissions $ 1.00 Variable administrative expense $ 0.65 If 9,700 units are sold, the variable cost per unit sold is closest to:

Answer 1

Answer:

Total Variable Cost per Unit $14

Explanation:

We re asked for the variable cost per unit which are constant at unit level.

The fixed cost are not relevant.

So we just need to add the current variable cost.

Direct materials $ 6.85

Direct labor $ 3.75

Variable manufacturing overhead $ 1.75

Sales commissions $ 1.00

Variable administrative expense $ 0.65

Total Variable $14