Edal Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:

A) $63.70
B) $84.40
C) $53.30
D) $20.70

Question

Edal Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product.

The best estimate of the total variable manufacturing cost per unit is:

A) $63.70
B) $84.40
C) $53.30
D) $20.70

Makaveli Swindell · Accepted Answer

Final Answer : B, Explanation :  Direct materials cost per unit = Change in cost ÷ Change in activity= ($319,800 - $266,500)÷ (6,000 units - 5,000 units)= $53,300 ÷ 1,000 units= $53.30 per unitDirect labor cost per unit = Change in cost ÷ Change in activity= ($62,400 - $52,000)÷ (6,000 units - 5,000 units)= $10,400 ÷ 1,000 units= $10.40 per unitVariable manufacturing overhead per unit = Change in cost ÷ Change in activity= ($769,200 - $748,500)÷ (6,000 units - 5,000 units)= $20,700 ÷ 1,000 units= $20.70 per unitTotal variable manufacturing cost per unit = Direct materials per unit + Direct labor per unit + Variable manufacturing overhead per unit = $53.30 per unit + $10.40 per unit + $20.70 per unit= $84.40 per unit

Edal Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:

A) $63.70
B) $84.40
C) $53.30
D) $20.70

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Learning Objectives

Related questions

Edal Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:A) $63.70B) $84.40C) $53.30D) $20.70

Definitions

Learning Objectives

Learning Objectives

Related questions

Edal Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:

A) $63.70
B) $84.40
C) $53.30
D) $20.70