Tustin Corporation has provided the following data for its two most recent years

Question

Tustin Corporation has provided the following data for its two most recent years of operation:

The unit product cost under variable costing in Year 1 is closest to:

Multiple Choice

$46.00

$26.00

$20.00

$40.00

Selling price per unit $ 68 Manufacturing costs: Variable manufacturing cost per unit produced: Direct materials $ 10 Direct labor $ 6 Variable manufacturing overhead $ 4 Fixed manufacturing overhead per year $ 220,000 Selling and administrative expenses: Variable selling and administrative expense per unit sold $ 6 Fixed selling and administrative expense per year $ 61,000

Explanation / Answer

unit product cost under variable costing in Year 1 i=Direct material+Direct labor+Variable manufacturing overhead

=(10+6+4)

which is equal to

=$20 per unit.

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