Swansea Finishing produces and sells a decorative pillow for $ 98.00 per unit. In the first month of operation, 2,400 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:

Variable manufacturing costs $ 25.00 per unit

Variable marketing costs $ 5.00 per unit

Fixed manufacturing costs $ 16.00 per unit

Administrative expenses, all fixed $ 22.00 per unit

Ending inventories:

Direct materials 0

WIP 0

Finished goods 650 units

What is cost of goods sold per unit using variable costing?

Question

Business

Marlie Freeman

5 April, 02:23

Swansea Finishing produces and sells a decorative pillow for $ 98.00 per unit. In the first month of operation, 2,400 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes:

Variable manufacturing costs $ 25.00 per unit

Variable marketing costs $ 5.00 per unit

Fixed manufacturing costs $ 16.00 per unit

Administrative expenses, all fixed $ 22.00 per unit

Ending inventories:

Direct materials 0

WIP 0

Finished goods 650 units

What is cost of goods sold per unit using variable costing?

+2

Answers (1)

Know the Answer?

Dominique Fischer · Answer 1

Cost of Goods Sold per unit = $25.00

Explanation:

Manufacturing Costs under variable Costing only considers the Variable Manufacturing Costs as Products Cost. Fixed Manufacturing Costs and All Non - Manufacturing Costs are treated as Period Costs.

Manufacturing Cost per unit = Variable manufacturing costs

= $25.00

Therefore,

Cost of Goods Sold per unit = $25.00