Kasawaki Company incurred the following costs in manufacturing digital cameras: During the period, the company produced and sold 1,000 units.
What is the inventory cost per unit using variable costing?

Question

Kasawaki Company incurred the following costs in manufacturing digital cameras:  During the period, the company produced and sold 1,000 units.
What is the inventory cost per unit using variable costing?

Quizplus · Accepted Answer

Variable costing only includes the variable costs (direct materials, direct labor, and variable manufacturing overhead) in inventory cost. 
Total variable costs = $25 + $10 + $7 = $42
Inventory cost per unit = Total variable costs / Units produced = $42 / 1,000 = $0.42
Therefore, the inventory cost per unit using variable costing is $42.

Kasawaki Company Incurred the Following Costs in Manufacturing Digital Cameras