Homework Answers
Variable manufacturing cost = Direct materials + Direct labor +
Variable overhead
Variable manufacturing cost = $318,000 + $88,000 + $62,000
Variable manufacturing cost = $468,000
Variable manufacturing cost per unit = Variable manufacturing
cost / Units produced
Variable manufacturing cost per unit = $468,000 / 2,000
Variable manufacturing cost per unit = $234.00
Total variable cost per unit = Variable manufacturing cost per
unit + Variable selling and administrative cost per unit
Total variable cost per unit = $234.00 + $18.00
Total variable cost per unit = $252.00
Total sales = Selling price per unit * Units sold
Total sales = $400.00 * 1,800
Total sales = $720,000
Contribution margin per unit = Selling price per unit - Total
variable cost per unit
Contribution margin per unit = $400.00 - $252.00
Contribution margin per unit = $148.00
Total contribution margin = Contribution margin per unit * Units
sold
Total contribution margin = $148.00 * 1,800
Total contribution margin = $266,400
Variable costing income = Total contribution margin - Fixed
overhead cost - Fixe selling and administrative cost
Variable costing income = $266,400 - $94,000 - $56,000
Variable costing income = $116,400
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