Kray Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 6,000 Variable costs per unit: Direct materials$40 Direct labor$19 Variable manufacturing overhead$8 Variable selling and administrative expense$2 Fixed costs: Fixed manufacturing overhead$144,000 Fixed selling and administrative expense$198,000 There were no beginning or ending inventories. The variable costing unit product cost was:

The variable costing unit product cost was $69.

Explanation:

Variable Product Costing is a situation whereby only the variable costs of production is taking into account to estimating the cost per unit of a product. This implies that none of the fixed cost will be included in the cost of the product.

Based on the explanation above, the variable costing unit product cost to produce a single product by Kray Inc. can be calculated as follows:

Kray Inc.

Calculation of Variable Costing Unit Product Cost

Particulars                                                          Amount ($)    

Direct materials                                                        40

Direct labor                                                               19

Variable manufacturing overhead                           8

Variable selling and administrative expense         2      

Variable cost per unit                                               69    

Therefore, the variable costing unit product cost was $69.