Question

Dallavalle Corporation manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable costs per unit: Direct materials $ 93 Fixed costs per year: Direct labor $ 320,000 Fixed manufacturing overhead $ 2,144,000 Fixed selling and administrative expenses $ 1,364,000 The company does not have any variable manufacturing overhead costs or variable selling and administrative expenses. During its first year of operations, the company produced 32,000 units and sold 31,000 units. The company’s only product is sold for $238 per unit. Assume that the company uses a variable costing system that assigns $10 of direct labor cost to each unit that is produced. The unit product cost under this costing system is:

Answer 1

Answer:

Unitary variable cost= $103

Explanation:

Giving the following information:

Variable costs per unit:

Direct materials $ 93

Fixed costs per year:

Direct labor $ 320,000

Fixed manufacturing overhead $ 2,144,000

Fixed selling and administrative expenses $ 1,364,000

Assume that the company uses a variable costing system that assigns $10 of direct labor cost to each unit that is produced.

Variable cost= direct material + direct labor

Unitary variable cost= 93 + 10= $103