Edeen Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product. The best estimate of the total variable manufacturing cost per unit is:
A)$62.20
B)$96.50
C)$109.30
D)$12.80

Question

Edeen Corporation has provided the following production and total cost data for two levels of monthly production volume.The company produces a single product.   The best estimate of the total variable manufacturing cost per unit is:
A)$62.20 
B)$96.50 
C)$109.30 
D)$12.80

Quizplus · Accepted Answer

Direct materials cost per unit = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($373,200 - $311,000)F1F1F1S1F1F1F10 (6,000 units - 5,000 units)
= $62,200 F1F1F1S1F1F1F10 1,000 per unit
= $62.20 per unit
Direct labor cost per unit = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($205,800 - $171,500)F1F1F1S1F1F1F10 (6,000 units - 5,000 units)
= $34,300 F1F1F1S1F1F1F10 1,000 units
= $34.30 per unit
Variable manufacturing overhead per unit = Change in cost F1F1F1S1F1F1F10 Change in activity
= ($427,800 - $415,000)F1F1F1S1F1F1F10 (6,000 units - 5,000 units)
= $12,800 F1F1F1S1F1F1F10 1,000 units
= $12.80 per unit
Total variable manufacturing cost per unit = Direct materials per unit + Direct labor per unit + Variable manufacturing overhead per unit = $62.20 per unit + $34.30 per unit + $12.80 per unit
= $109.30 per unit

Edeen Corporation Has Provided the Following Production and Total Cost