Unile Auto produces and sells an auto part for $60.00 per unit. In 2015, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes:
$\begin{array}{ll}
\text { Direct materials } & \$ 20.00 \text { per unit } \
\text { Direct manufacturing labor } & \$ 4.00 \text { per unit } \
\text { Variable manufacturing costs } & \$ 1.00 \text { per unit } \
\text { Sales commissions } & \$ 6.00 \text { per part } \
\text { Fixed manufacturing costs } & \$ 750,000 \text { per year } \
\text { Administrative expenses all fixed } & \$ 270,000 \text { per year }
\end{array}$
-What is the inventoriable cost per unit using variable costing?
A) $20.00
B) $24.00
C) $25.00
D) $31.00

Question

Unile Auto produces and sells an auto part for $60.00 per unit. In 2015, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes:
 $\begin{array}{ll}
\text { Direct materials } & \$ 20.00 \text { per unit } \
\text { Direct manufacturing labor } & \$ 4.00 \text { per unit } \
\text { Variable manufacturing costs } & \$ 1.00 \text { per unit } \
\text { Sales commissions } & \$ 6.00 \text { per part } \
\text { Fixed manufacturing costs } & \$ 750,000 \text { per year } \
\text { Administrative expenses all fixed } & \$ 270,000 \text { per year }
\end{array}$
-What is the inventoriable cost per unit using variable costing?
A) $20.00
B) $24.00
C) $25.00
D) $31.00

Quizplus · Accepted Answer

Inventoriable costs under variable costing include direct materials, direct labor, and variable manufacturing costs. Therefore, the inventoriable cost per unit is $20.00 + $4.00 + $1.00 = $25.00.

Unile Auto Produces and Sells an Auto Part for $60