Aqua Primavera, Inc. has provided the following information for the year. $\begin{array}{|l|lc|}
\hline \text { Units produced } & 11,000 \text { units } \
\hline \text { Sales price } & \$ 500 \text { per unit } \
\hline \text { Direct materials } & \$ 45 \text { per unit } \
\hline \text { Direct labor } & \$ 30 \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 55 \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 480,000 \text { per year } \
\hline \text { Variable selling and administration costs } & \$ 75 \text { per unit } \
\hline \text { ced selling and administration costs } & \$ 300,000 \text { per year } \
\hline
\end{array}$
What is the unit product cost using variable costing?

Question

Aqua Primavera, Inc. has provided the following information for the year. $\begin{array}{|l|lc|}
\hline \text { Units produced } & 11,000 \text { units } \
\hline \text { Sales price } & \$ 500 \text { per unit } \
\hline \text { Direct materials } & \$ 45 \text { per unit } \
\hline \text { Direct labor } & \$ 30 \text { per unit } \
\hline \text { Variable manufacturing overhead } & \$ 55 \text { per unit } \
\hline \text { Fixed manufacturing overhead } & \$ 480,000 \text { per year } \
\hline \text { Variable selling and administration costs } & \$ 75 \text { per unit } \
\hline \text { ced selling and administration costs } & \$ 300,000 \text { per year } \
\hline
\end{array}$
 What is the unit product cost using variable costing?

Quizplus · Accepted Answer

Variable costing includes all variable production costs: direct materials, direct labor, and variable manufacturing overhead. Thus, the unit product cost is calculated as $45 (direct materials) + $30 (direct labor) + $55 (variable manufacturing overhead) = $130.

Aqua Primavera, Inc What Is the Unit Product Cost Using Variable Costing? A)

Aqua Primavera, Inc What Is the Unit Product Cost Using Variable Costing?
A)