Eddins 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)$60.10
B)$38.40
C)$21.70
D)$22.30

Question

Eddins 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)$60.10 
B)$38.40 
C)$21.70 
D)$22.30

Quizplus · Accepted Answer

Direct material cost per unit = $89,200 F1F1F1S1F1F1F10 4,000 units = $22.30
(Alternatively,direct material cost per unit = $111,500 F1F1F1S1F1F1F10 5,000 units = $22.30)
Direct labor cost per unit = $64,400 F1F1F1S1F1F1F10 4,000 units = $16.10
(Alternatively,direct labor cost per unit = $80,500 F1F1F1S1F1F1F10 5,000 units = $16.10)
Variable manufacturing overhead cost = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($314,500 - $292,800) F1F1F1S1F1F1F10 (5,000 - 4,000) = $21.70
Total variable manufacturing cost per unit = $22.30 + $16.10 + $21.70 = $60.10

Eddins Corporation Has Provided the Following Production and Total Cost