Question

E21-30 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. 80 Direct materials Direct labor Variable overhead Sales commission

Answer 1

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

Units produced and sold	25 units	50 units	100 units	Total variable cost for each variable cost
Total direct materials (a) @ $ 40 per unit	$ 1,000 ($40 × 25 units)	$ 2,000 ($40 × 50 units)	$ 4,000 ($40 × 100 units)	$ 7,000
Total direct labor (b) @ $ 80 per unit	$ 2,000 ($80 × 25 units)	$ 4,000 ($80 × 50 units)	$ 8,000 ($80 × 100 units)	$ 14,000
Total variable overhead (c) @ $ 9 per unit	$ 225 ($9 × 25 units)	$ 450 ($9 × 50 units)	$ 900 ($9 × 100 units)	$ 1,575
Total sales commission (d) @ $ 12 per unit	$ 300 ($12 × 25 units)	$ 600 ($12 × 50 units)	$ 1,200 ($12 × 100 units)	$ 2,100
Total variable costs (a) + (b) + (c) + (d)	$ 3,525	$ 7,050	$ 14,100	$ 24,675

• Variable costs are those costs that change according to the change in units of production.