Rincon Gifts had the following costs in May when 400 ceramic pots were produced: materials, $4,200; labor cost, $1,600; depreciation, $800; rent, $700; and other fixed costs, $500.Which one of the following is the correct cost for Rincon?

Question

Quizplus · Accepted Answer

The variable costs per unit are calculated by dividing the total variable costs (materials and labor) by the number of units produced. Here, variable costs are $4,200 (materials) + $1,600 (labor) = $5,800. Dividing by 400 units gives $14.50 per unit.

Rincon Gifts Had the Following Costs in May When 400