Ross Company produces a single product. The company has direct materials costs of $8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty percent of the manufacturing overhead is for fixed costs. In addition, variable selling and administrative costs are $2 per unit, and fixed selling and administrative costs are $3 per unit at the current activity level. Assume that direct labor is a variable cost.
-Under variable costing, the unit product cost is:
A) $24
B) $20
C) $18
D) $21

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The Answer of Ross Company produces a single product. The company has direct materials costs of $8 per unit, direct labor costs of $6 per unit, and manufacturing overhead of $10 per unit. Sixty percent of the manufacturing overhead is for fixed costs. In addition, variable selling and administrative costs are $2 per unit, and fixed selling and administrative costs are $3 per unit at the current activity level. Assume that direct labor is a variable cost.
-Under variable costing, the unit product cost is:
A) $24
B) $20
C) $18
D) $21

Ross Company Produces a Single Product