Exhibit 6-7
Bodega Chocolate,Inc.is a new company that produces a single product.The company has no beginning inventory.During the year the company produced 10,000 units out of which 9,000 were sold.Below are Bodega's costs:
$\begin{array}{ll}
\underline{\text { Variable costs per unit:} } \
\text { Production } & \$ 4.00 \
\text { Selling and administrative } & \$ 2.50
\end{array}$

$\begin{array}{ll}
\underline{\text { Total fixed costs for the year:}}\
\text {Production}&\$20,700.00\
\text {Selling and administrative}&\$85,000
\end{array}$

-Refer to Exhibit 6-7.What is the unit product cost using variable costing?

Question

Exhibit 6-7
Bodega Chocolate,Inc.is a new company that produces a single product.The company has no beginning inventory.During the year the company produced 10,000 units out of which 9,000 were sold.Below are Bodega's costs:
 $\begin{array}{ll}
\underline{\text { Variable costs per unit:} } \
\text { Production } & \$ 4.00 \
\text { Selling and administrative } & \$ 2.50
\end{array}$

$\begin{array}{ll}
\underline{\text { Total fixed costs for the year:}}\
\text {Production}&\$20,700.00\
\text {Selling and administrative}&\$85,000
\end{array}$

-Refer to Exhibit 6-7.What is the unit product cost using variable costing?

Quizplus · Accepted Answer

Variable costing includes only the variable production costs in the unit product cost. Here, the variable production cost per unit is given as $4.00, and since variable costing does not include variable selling and administrative costs or any fixed costs in the unit product cost, the correct answer is $4.00.

Exhibit 6-7 Bodega Chocolate,Inc -Refer to Exhibit 6-7

Exhibit 6-7
Bodega Chocolate,Inc -Refer to Exhibit 6-7