During January, Lang, Inc. produced 10,000 units of product with costs as follows:$\begin{array}{ll}\text { Direct materials }&\$40,000\
\text { Direct labor } & 22,000 \
\text { Variable overhead } & 10,000 \
\text { Fixed overhead } & 90,000
\end{array}$ What is Lang's unit cost for January, calculated on the variable costing basis?

Question

Quizplus · Accepted Answer

Variable costing includes only the variable costs, which are direct materials, direct labor, and variable overhead. The total variable cost is $40,000 + $22,000 + $10,000 = $72,000. Dividing this by the 10,000 units produced gives a unit cost of $7.20.

During January, Lang, Inc What Is Lang's Unit Cost for January, Calculated on the Costs