Fast Track Auto produces and sells an auto part for $60 per unit.In 2017,120,000 parts were produced and 75,000 units were sold.Other information for the year includes:

What is the inventoriable cost per unit using variable costing?
A)$20
B)$25
C)$28
D)$35

Question

Fast Track Auto produces and sells an auto part for $60 per unit.In 2017,120,000 parts were produced and 75,000 units were sold.Other information for the year includes:

What is the inventoriable cost per unit using variable costing?
A)$20 
B)$25 
C)$28 
D)$35

Quizplus · Accepted Answer

Variable costing considers all variable manufacturing costs as inventoriable costs.Therefore,in this case,direct materials,direct manufacturing labor,and variable manufacturing costs will be considered as inventoriable cost.The total inventoriable cost is $28 ($20 + $5 + $3).

Fast Track Auto Produces and Sells an Auto Part for $60