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4 March, 18:06

MC Qu. 169 A manufacturer reports the following costs to produce ... A manufacturer reports the following costs to produce 23,000 units in its first year of operations: Direct materials, $23 per unit, Direct labor, $19 per unit, Variable overhead, $276,000, and Fixed overhead, $322,000. The total product cost per unit under variable costing is:

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  1. 4 March, 20:49
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    Unitary product cost = $54

    Explanation:

    Giving the following information:

    Production = 23,000 units

    Direct materials = $23 per unit

    Direct labor = $19 per unit

    Variable overhead = $276,000

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

    First, we need to calculate the unitary variable overhead.

    Unitary overhead = 276,000/23,000 = $12 per unit

    Unitary product cost = 23 + 19 + 12 = $54
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