Hardee Inc., which produces a single product, has provided the following data for its most recent month of operations: There were no beginning or ending inventories. The unit product cost under variable costing was:
A)$35 per unit
B)$32 per unit
C)$103 per unit
D)$33 per unit

Question

Hardee Inc., which produces a single product, has provided the following data for its most recent month of operations:  There were no beginning or ending inventories. The unit product cost under variable costing was:
A)$35 per unit 
B)$32 per unit 
C)$103 per unit 
D)$33 per unit

Quizplus · Accepted Answer

Under variable costing, only variable costs associated with the production of the product are included in the unit product cost. The total variable costs incurred during the month were $528,000, and the total units produced were 16,000, which gives a variable cost per unit of $33 ($528,000 ÷ 16,000 units). Therefore, the unit product cost under variable costing was $33 per unit.