Q21E - Horngren'S Financial And Managerial Accounting

Question

Question: Determining total variable cost 

For each variable cost per unit listed below, determine the total variable cost when units produced and sold are 25, 50, and 100 units. 

Direct materials              $ 40

 Direct labor                       80 

Variable overhead               9 

Sales commission              12

Step-by-Step Solution

Answer

Answer

 

The total variable cost for 25 units is $3,525   per unit, for 50 units is $7,050 , for 100 units is $14,100 .

Step 1: Calculation of total variable cost per unit

Particulars	Amount
Direct materials	$40
Direct labor	$80
Variable overhead	$9
Sales commission	$12
Total variable cost per unit	$141

Step 2: Calculation of fixed cost per unit

	25	50	100
Variable cost per unit	$141	$141	$141
× No. of units	25	50	100
Fixed cost per unit	$3,525	$7,050	$14,100