The Kringel Company provides the following information:
$\begin{array}{lr}
\text { Sales }(200,000 \text { units) } & \$ 500,000 \
\text { Manufacturing costs: } & \
\text { Variable } & 170,000\
\text { Fixed } &30,000 \
\text { Selling and administrative costs: } & \
\text { Variable } &80,000 \
\text { Fixed } & 20,000
\end{array}$
-Refer to the figure.What is the variable product cost per unit for Kringel?

Question

The Kringel Company provides the following information:
 $\begin{array}{lr}
\text { Sales }(200,000 \text { units) } & \$ 500,000 \
\text { Manufacturing costs: } &  \
\text { Variable } & 170,000\
\text { Fixed } &30,000  \
\text { Selling and administrative costs: } & \
\text { Variable } &80,000  \
\text { Fixed } & 20,000
\end{array}$ 
-Refer to the figure.What is the variable product cost per unit for Kringel?

Quizplus · Accepted Answer

Variable product cost per unit can be calculated by adding material, labor and variable overhead cost per unit. In the given information, these costs are material cost per unit ($2.00), labor cost per unit ($0.50) and variable overhead cost per unit ($0.35). Therefore, variable product cost per unit = $2.00 + $0.50 + $0.35 = $2.85. The only option that matches this calculation is B) $0.85.

The Kringel Company Provides the Following Information -Refer to the Figure