Paolucci Corporation\'s relevant range of activity is 6,300 units to 13,500 unit
ID: 2432902 • Letter: P
Question
Paolucci Corporation's relevant range of activity is 6,300 units to 13,500 units. When it produces and sells 9,900 units, its average costs per unit are as follows: Average Cost per Unit Direct materials $ 6.75 Direct labor $ 3.65 Variable manufacturing overhead $ 1.65 Fixed manufacturing overhead $ 2.90 Fixed selling expense $ 0.95 Fixed administrative expense $ 0.65 Sales commissions $ 0.90 Variable administrative expense $ 0.55 If 8,900 units are sold, the variable cost per unit sold is closest to:
Explanation / Answer
Variable cost per unit sold = Direct materials + Direct labor + Variable manufacturing overhead + Sales commissions + Variable administrative expense
= $6.75 + $3.65 + $1.65 + $0.90 + $0.55
= $13.50
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