Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 119 Units in beginning inventory 0 Units produced 6,550 Units sold 6,250 Units in ending inventory 300 Variable costs per unit: Direct materials $ 17 Direct labor $ 47 Variable manufacturing overhead $ 11 Variable selling and administrative expense $ 11 Fixed costs: Fixed manufacturing overhead $ 176,850 Fixed selling and administrative expense $ 25,500 What is the unit product cost for the month under variable costing?

Question

Business

Summer Rowland

19 September, 21:24

Aaron Corporation, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $ 119 Units in beginning inventory 0 Units produced 6,550 Units sold 6,250 Units in ending inventory 300 Variable costs per unit: Direct materials $ 17 Direct labor $ 47 Variable manufacturing overhead $ 11 Variable selling and administrative expense $ 11 Fixed costs: Fixed manufacturing overhead $ 176,850 Fixed selling and administrative expense $ 25,500 What is the unit product cost for the month under variable costing?

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Jesse Mendez · Answer 1

Unitary product cost = $75

Explanation:

Giving the following information:

Direct materials $ 17

Direct labor $ 47

Variable manufacturing overhead $ 11

Under the variable costing method, the unitary product cost is calculated using the direct material, direct labor, and variable unitary overhead:

Unitary product cost = 17 + 47 + 11 = $75