The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product:
-The best estimate of the total variable manufacturing cost per unit is:
A)$22.10
B)$66.70
C)$88.80
D)$15.70

Question

The following production and average cost data for two levels of monthly production volume have been supplied by a company that produces a single product: 
-The best estimate of the total variable manufacturing cost per unit is:
A)$22.10 
B)$66.70 
C)$88.80 
D)$15.70

Quizplus · Accepted Answer

Total manufacturing overhead at 1,000 units = 1,000 units F1F1F1S1F1F1F10 $47.70 per unit = $47,700
Total manufacturing overhead at 2,000 units = 2,000 units F1F1F1S1F1F1F10 $34.90 per unit = $69,800
 11eaa48f_7c08_042b_9e4a_531e4a14b784_TB2485_00 Variable cost per unit = Change in cost F1F1F1S1F1F1F10 Change in activity
= $22,100 F1F1F1S1F1F1F10 1,000 units
= $22.10 per unit
Total variable cost per unit = Direct materials per unit + Direct labor per unit + variable manufacturing overhead per unit
= $15.70 + $51.00 + $22.10
= $88.80

The Following Production and Average Cost Data for Two Levels