Question

A company produces and sells cell phones for $103 per unit. in the first month of operation, 2300 units were produced and 1800 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: variable manufacturing costs $23 per unit variable marketing costs $8 per unit administration expenses, all fixed $20 per unit ending inventories: direct materials 0 WIP 0 Finished goods 500 units What is the cost of goods sold per unit using variable costing?

Answer 1

Calculate cost of goods sold per unit using variable costing:

Cost of goods sold per unit under variable costing = Variable manufacturing cost per unit = $23

Cost of goods sold under variable costing = 1800*23 = $41400

cost of goods sold per unit using variable costing = $23 per unit