The estimated unit costs for a company to produce and sell a product at a level...

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The estimated unit costs for a company to produce and sell a product at a level...

The estimated unit costs for a company to produce and sell a product at a level of 13,800 units per month are as follows:

Cost Item	Estimated Unit Cost
Direct material	$	37
Direct labor		25
Variable manufacturing overhead		22
Fixed manufacturing overhead		9
Variable selling expenses		3
Fixed selling expenses		4

What are the estimated variable costs per unit?

$87

$50

$84

$62

business accounting

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Answer 1

Answer #1

Answer: Variable Cost- It is the cost that varies according to the level of production. It increases or decreases, depends upon the production.

Calculating variable cost per unit:

Direct material + Direct labor + Variable manufacturing overheads + Variable selling expenses

37+25+22+3

Variable cost per unit = $87

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Answer 2

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