Allston Products sells a special kind of effects pedal for musical performers. Each unit sells for $20.00. Additional data for the month of April, 2011, are as follows: Using variable costing, what is the cost per unit produced?

Question

Allston Products sells a special kind of effects pedal for musical performers. Each unit sells for $20.00. Additional data for the month of April, 2011, are as follows:  Using variable costing, what is the cost per unit produced?

Quizplus · Accepted Answer

The cost per unit produced using variable costing is calculated as follows:
Total variable cost / Total units produced
= ($7,000 + $900 + $600) / 550
= $8,500 / 550
= $15.45 (rounded to the nearest cent)
Therefore, the cost per unit produced is $15.45, which is closest to option C ($14.50). Option D ($12.75) is too low and options A and B are too high.

Allston Products Sells a Special Kind of Effects Pedal for Musical