Aqua Primavera, Inc. has provided the following information for the year. Units produced 7 comma 000 units Sales price $ 700 per unit Direct materials $ 35 per unit Direct labor $ 30 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 430 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 200 comma 000 per year What is the unit product cost using variable costing?

Question

Business

Keith Logan

19 March, 02:12

Aqua Primavera, Inc. has provided the following information for the year. Units produced 7 comma 000 units Sales price $ 700 per unit Direct materials $ 35 per unit Direct labor $ 30 per unit Variable manufacturing overhead $ 20 per unit Fixed manufacturing overhead $ 430 comma 000 per year Variable selling and administration costs $ 70 per unit Fixed selling and administration costs $ 200 comma 000 per year What is the unit product cost using variable costing?

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Sophia Reese · Answer 1

Unitary product cost = $85

Explanation:

Giving the following information:

Direct materials $35 per unit

Direct labor $30 per unit

Variable manufacturing overhead $20 per unit

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

Unitary product cost = 35 + 30 + 20 = $85