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

Question

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

Quizplus · Accepted Answer

Under variable costing, only variable manufacturing costs are included in the cost of inventory. In this case, the variable manufacturing costs are $30 (direct materials) + $6 (direct labor) + $6 (variable overhead) = $42 per unit. Therefore, the inventory cost per unit is $42. Option C is the correct answer.

Toshi Company Incurred the Following Costs in Manufacturing Desk Calculators