Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $ 37 per unit Fixed manufacturing overhead costs $ 220,000 Sales price $ 195 per unit Variable manufacturing overhead $ 20 per unit Direct labor $ 25 per unit Fixed marketing and administrative costs $ 200,000 Units produced and sold 6,000 Variable marketing and administrative costs $ 7 per unit Required: a. Determine the variable cost per unit.

Question

Business

Mariyah Boyle

15 April, 06:11

Larcker Manufacturing's cost accountant has provided you with the following information for January operations: Direct materials $ 37 per unit Fixed manufacturing overhead costs $ 220,000 Sales price $ 195 per unit Variable manufacturing overhead $ 20 per unit Direct labor $ 25 per unit Fixed marketing and administrative costs $ 200,000 Units produced and sold 6,000 Variable marketing and administrative costs $ 7 per unit Required: a. Determine the variable cost per unit.

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Amirah Wolfe · Answer 1

Unitary variable cost = $89

Explanation:

Giving the following information:

Direct materials $37 per unit

Variable manufacturing overhead $20 per unit

Direct labor $25 per unit

Variable marketing and administrative costs $ 7 per unit

The unitary variable cost is the sum of all the variable components.

Unitary variable cost = 37 + 20 + 25 + 7 = $89