Given the following data, calculate product cost per unit under variable costing

Question

Given the following data, calculate product cost per unit under variable costing. $7 per unit $13,30 per unit $11,00 per unit $11,60 per unit $16,50 per unit A company is currently operating at 75% capacity and producing 3,000 units. Current cost information relating to this production is shown in the table below. Two company has been approached by a customer with a request for a 200-unit special. What is the minimum per unit sales price that management would accept for this order if the company wishes to increase current profits? Any amount over $43 per unit Any amount over $17 per unit Any amount over $21 per unit Any amount over $13 per unit Any amount over $22 per unit Under absorption costing, a company had the following unit costs when 9,000 units were produced.

Explanation / Answer

Answer to Question No 2:

Direct Labour = $ 8 per unit

Direct Mateial = $ 3 per uni

Varaible Overhead per unit (30000/50000) = $ 0.6 per unit

Total Varaible Cost = $ 11.60

Fixed Cost per unit (85,000/50,000) = $ 1.70

Therefore, Product Cost per unit = 11.6 + 1.7 = $ 13.30

The Answer is $ 13.30

Answer to Question No 3:

Direct Materila = $ 7

Direct Labour = $ 6

Varaible Overhead = $ 4

Total Varaible Cost = $ 17

The Minimum price = Any amount over $ 17 per unit

The Answer is Any amount over $ 17 per unit

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