Product cost under the variable costing method


The Wisconsin Company manufactures and sells a single product. The following costs were incurred during the company's first year of operation:
Variable cost per unit:

  • Manufacturing:
  • Direct materials $22
  • Direct Labor $ 5
  • Variable manufacturing overhead $ 4
  • Variable selling and administrative $ 6
  • Fixed costs per year:
  • Fixed manufacturing overhead $ 200,000
  • Fixed selling and administrative expenses $100,000

During the year, the company produced 25,000 units and sold 20,000 units. The selling price of the company's product is $50 per unit.Compute the company's unit product cost under the variable costing method.

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Accounting Basics: Product cost under the variable costing method
Reference No:- TGS0708594

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