Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold. $$\begin{array}{l}
\text { Wings, breading, and }\
\begin{array} { l r }
\text { Sauce } & \$ 4,900 \
\text { Direct labor (Variable) } & 3,500 \
\text { Rent } & 1,100 \
\text { Depreciation } & 900 \
\text { Other fixed costs } & 400
\end{array}
\end{array}$$ Each wing sells for $0.80 each.How much is the budgeted variable cost per unit?

Question

Hurricane Wings has budgeted the following costs for a month in which 24,000 wings will be cooked and sold. $$\begin{array}{l}
\text { Wings, breading, and }\
\begin{array} { l r } 
\text { Sauce } & \$ 4,900 \
\text { Direct labor (Variable) } & 3,500 \
\text { Rent } & 1,100 \
\text { Depreciation } & 900 \
\text { Other fixed costs } & 400
\end{array}
\end{array}$$ Each wing sells for $0.80 each.How much is the budgeted variable cost per unit?

Quizplus · Accepted Answer

The budgeted variable costs are the sum of wings, breading, sauce, and direct labor, which is $4,900 + $3,500 = $8,400. Dividing by 24,000 wings gives a variable cost per unit of $0.35.

Hurricane Wings Has Budgeted the Following Costs for a Month