Question

Computing unit product cost, variable costing Calculate the unit product cost using variable costing. Round your answer to the nearest cent.

Use the following information for Short Exercises S21-2 and S21-3.

Martin Company had the following costs:

Units produced 320 units Direct materials $ 71 per unit Direct labor 40 per unit Variable manufacturing overhead 13 per unit Fixed manufacturing overhead 7,360 per year Variable selling and administrative costs 22 per unit Fixed selling and administrative costs 1,920 per year

Short answer

Answer

The total unit product cost is $124.

Step-by-step solution

Calculation of fixed manufacturing overhead

Fixed manufacturing overheads are treated as a period cost under the variable cost method and do not consider while calculating unit product cost.

Calculation of unit product cost

Particulars	Amount
Direct material	$71
Direct labor	$40
Variable manufacturing overhead	$13
Total unit product cost	$124