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The estimated unit costs for a company to produce and sell a product at a level of 12,100 units per month are as follows: Cost Item Estimated Unit Cost Direct material $ 30 Direct labor 21 Variable manufacturing overhead 16 Fixed manufacturing overhead 4 Variable selling expenses 2 Fixed selling expenses 3 What are the estimated variable costs per unit

Respuesta :

The estimated variable costs per unit is $69.

What is estimated variable cost per unit?

The cost of each unit of goods that a firm produces is referred to as variable cost per unit.

Variable costs alter as changes take place in the company's level of production or activity. Changes in the business have an impact on unit variable cost; as more units of a good are produced, additional costs are spent.

Calculation for the estimated variable cost:

Given inventory is -

Cost Item Estimated

Unit Cost

Direct material $ 30.

Direct labour $21.

Variable manufacturing overhead $16

Fixed manufacturing overhead $4

Variable selling expenses $2

Fixed selling expenses $3

Apply the formula for variable cost;

Estimated variable cost = (Direct material + Direct labour + Variable manufacturing  overhead + Variable selling  expenses)

Substitute the values in the formula, we get

Estimated variable cost = $30 + $21 + $16 + $2

                                       = $69

Therefore, the estimated variable costs per unit is $69.

To know more about the unit variable cost, here

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