Diego Company manufactures one product that is sold for $76 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 58,000 units and sold 54,000 units. Variable costs per unit:

Manufacturing:
Direct materials $ 23
Direct labor $ 15
Variable manufacturing overhead $ 3
Variable selling and administrative $ 3
Fixed costs per year:
Fixed manufacturing overhead $ 1,160,000
Fixed selling and administrative expenses $ 640,000

The company sold 40,000 units in the East region and 14,000 units in the West region. It determined that $320,000 of its fixed selling and administrative expenses is traceable to the West region, $270,000 is traceable to the East region, and the remaining $50,000 is a common fixed cost. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.

What is the unit product cost under variable costing?

Variable Product Costs Per Unit $ 41

Explanation:

Diego Company Manufacturers

Variable Product Costs Per Unit $ 41

Total Variable Costs $ 41

Direct materials $ 23

Direct labor $ 15

Variable manufacturing overhead $ 3

Variable Costing involves the use of variable expenses only.

The product Costs equals the sum of  Direct Labor, Direct Material And Variable Overheads. The Period Costs involves the Variable Selling and administrative expenses.

month 1 start amount =$3287.90 interest=(3287.90x0.0145/12)3.97 total to pay=$3291.81 paid =$1200 balance =$2,091.87

month 2 starting amount= $2,091.87 interest =$25.28 total to pay =$2117.15 paid =$1200 balance $917.15

month 3 starting amount =$917.15 interest =$11.08 total to pay =$928.23 paid =$928.23 balance =$0 total to pay 1200+1200+928.23 = $3328.23 it will take 3 months to pay a total of $3328.23

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