Question

Paolucci Corporation's relevant range of activity is 7,800 units to 16,000 units. When it produces and sells 11,900 units, its average costs per unit are as follows:

	Average Cost per Unit
Direct materials	$	7.00
Direct labor	$	3.90
Variable manufacturing overhead	$	1.90
Fixed manufacturing overhead	$	3.20
Fixed selling expense	$	1.20
Fixed administrative expense	$	0.90
Sales commissions	$	1.15
Variable administrative expense	$	0.80

If 10,900 units are sold, the variable cost per unit sold is closest to:

Answer 1

		10900	units
Variable cost	Per unit	Amount
Direct material	7	76300
Direct labor	3.9	42510
Variable manufacturing overheads	1.9	20710
Sales commission	1.15	12535
Variable admin expense	0.8	8720
Total	14.75	160775