Crow Corporation produces a single product and has the following cost structure:

Question

Crow Corporation produces a single product and has the following cost structure:
  

Number of units produced each year

2,000

Variable costs per unit:

    Direct materials

$26

    Direct labor

$61

    Variable manufacturing overhead

$6

    Variable selling and administrative expense

$7

Fixed costs per year:

    Fixed manufacturing overhead

$190,000

    Fixed selling and administrative expense

$36,000

The variable costing unit product cost is:

$93 per unit

$95 per unit

$96 per unit

$100 per unit

Number of units produced each year

2,000

Variable costs per unit:

    Direct materials

$26

    Direct labor

$61

    Variable manufacturing overhead

$6

    Variable selling and administrative expense

$7

Fixed costs per year:

    Fixed manufacturing overhead

$190,000

    Fixed selling and administrative expense

$36,000

Explanation / Answer

variable costing unit product cost= Direct materials+ Direct labor+Variable manufacturing overhead

which is equal to

=(26+61+6)

which is equal to

=$93 per unit.

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