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

Question

Bryans Corporation has provided the following data for its two most recent years of operation: Selling price per unit Manufacturing costs: 53 Variable manufacturing cost per unit produced: 13 Direct materials Direct labor Variable manufacturing overhead $63,000 Fixed manufacturing overhead per year Selling and administrative expenses: Variable selling and administrative expense per unit sold Fixed selling and administrative expense per year 4 $71,000 Year Year 2 Units in beginning inventory Units produced Units sold Units in ending inventory 3,000 7,000 7,000 3,000 3,0000 9,000 6,000 The unit product cost under variable costing in Year 1 is closest to:

Explanation / Answer

3 Variable costing Product cost Direct material 13.00 Direct labor 6.00 Variable manufacturing overhead 5.00 Variable manufacturing cost 24.00 Units manufactured 9000 Units sold 6,000 Income statement Sales revenue 318000 Less Variable expense Variable manufacturing cost 144000 (24*6000) Variable selling and admin cost 24000 (4*6000) Total variable expense 168000 Contribution margin 150000 Less Fixed cost Fixed manufacturing expense 63000 Fixed Marketing and Admin expense 71000 Total fixed expenses 134000 Net operating income 16000

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