Janos Company, which has only one product, has provided the following data conce

Question

Janos Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price ............................................. $111 Units in beginning inventory ................... 300 Units produced......................................... 2,000 Units sold ................................................. 2,200 Units in ending inventory ........................ 100 Variable costs per unit: Direct materials..................................... $29 Direct labor ........................................... 30 Variable manufacturing overhead ......... 4 Variable selling and administrative ...... 9 Fixed costs: Fixed manufacturing overhead ............. $34,000 Fixed selling and administrative........... 39,600 The company produces the same number of units every month, although the sales in units vary from month to month. The company's variable costs per unit and total fixed costs have been constant from month to month. 3. What is the unit product cost for the month under variable costing? A) $63 B) $80 C) $72 D) $89

Explanation / Answer

The answer is a. Variable costing only includes variable manufacturing costs in the cost of a product. ($29 + $30 + 4 = $63).

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