Jarvix Corporation,which has only one product,has provided the following data concerning its most recent month of operations: The company produces the same number of units every month,although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month. What is the unit product cost for the month under variable costing?
A)$83 per unit
B)$74 per unit
C)$90 per unit
D)$81 per unit

Question

Jarvix Corporation,which has only one product,has provided the following data concerning its most recent month of operations:  The company produces the same number of units every month,although the sales in units vary from month to month.The company's variable costs per unit and total fixed costs have been constant from month to month. What is the unit product cost for the month under variable costing?
A)$83 per unit 
B)$74 per unit 
C)$90 per unit 
D)$81 per unit

Quizplus · Accepted Answer

The unit product cost under variable costing is calculated by adding the variable cost per unit to the fixed cost per unit. Using the information provided in the table, we can calculate the total variable cost as follows:

10,000 units produced and sold x $40 variable cost per unit = $400,000 total variable cost

To calculate the fixed cost per unit, we can use the total fixed cost divided by the number of units produced:

$240,000 total fixed cost ÷ 10,000 units produced = $24 fixed cost per unit

Adding the variable cost per unit to the fixed cost per unit gives us the unit product cost under variable costing:

$40 variable cost per unit + $24 fixed cost per unit = $64 unit product cost

Therefore, the correct answer is B) $74 per unit.

Jarvix Corporation,which Has Only One Product,has Provided the Following Data