Flexlux, Inc. reports the following information: Units produced 600 units Units sold 600 units Sales price $ 110 per unit Direct materials $ 10 per unit Direct labor $ 35 per unit Variable manufacturing overhead $ 40 per unit Fixed manufacturing overhead $ 12 comma 000 per year Variable selling and administrative costs $ 5 per unit Fixed selling and administrative costs $ 15 comma 000 per year What is the unit product cost using variable costing?

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DelcieRiveria DelcieRiveria · Answer 1 · 2019-08-14T07:52:14+02:00

Answer:

The unit product cost through variable costing will be $85/ unit.

Explanation:

Variable costs can be defined as the costs incurred on variable factors. They change with change in number of inputs employed.

Fixed costs are incurred on fixed factors and remain constant in the entire production process.

Unit cost through variable costing will include only variable costs and not fixed costs.

Costs incurred on selling are not considered a part of product cost.

So, here unit product cost per unit

=direct materials cost+direct labor cost+variable manufacturing overhead

=$(10+35+40)

=$85 per unit