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26 June, 07:43

Columbia Products produced and sold 1,200 units of the company's only product in March. You have collected the following information from the accounting records:

Sales price (per unit) $125

Manufacturing costs:

Fixed overhead (for the month) 18,200

Direct labor (per unit) 10

Direct materials (per unit) 34

Variable overhead (per unit) 26

Marketing and administrative costs:

Fixed costs (for the month) 19,500

Variable costs (per unit) 5

Compute the following:

(1) Variable manufacturing cost per unit.

(2) Full cost per unit.

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Answers (1)
  1. 26 June, 08:29
    0
    1. $70

    2. $106.42

    Explanation:

    (1) Variable manufacturing cost per unit:

    = Direct labor + Direct material + Variable overhead

    = $10 + $34 + $26

    = $70

    (2) Full cost per unit:

    = Direct labor + Direct material + Variable overhead + Variable selling cost + (Fixed : 1,200)

    = $10 + $34 + $26 + $5 + [ (19,500 + 18,200) : 1,200) ]

    = $75 + $31.42

    = $106.42
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