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Hatfield Corporation, which has only one product, has provided the following data concerning its most recent month of operations:
| Selling price | $123 |
| Units in beginning inventory | 0 |
| Units produced | 6,400 |
| Units sold | 6,100 |
| Units in ending inventory | 300 |
| Variable costs per unit: | |
| Direct materials | $45 |
| Direct labor | $30 |
| Variable manufacturing overhead | $1 |
| Variable selling and administrative | $8 |
| Fixed costs: | |
| Fixed manufacturing overhead | $140,800 |
| Fixed selling and administrative | $91,500 |
What is the unit product cost for the month under variable costing?
$98 per unit
$84 per unit
$76 per unit
$106 per unit
Expert Answer
Answer : $76 per unit
Unit product cost under variable costing = Direct materials + Direct labor + variable manufacturing overhead
= $45 + $30 + $1
= $76 per unit.
