1 2 3 The breakeven is 2000 units the selling price is 12 pe

The breakeven is 2000 units, the selling price is $12 per unit and the fixed costs are $20,000. What is the variable cost per unit? Select one: O a. $2 o b. $3 O c. $4 O d. None of the above

Solution

1) The breakeven is 2000 units, the selling price is $12 per unit and the fixed costs are $20,000. What is the variable cost per unit?

Solution: $2

Working:

2000 = 20,000 / (12-variable cost)

12-variable cost = 10

variable cost = 2 per unit

2) Tustic LLC uses variable costing and absorption costing. Using the absorption costing income statement fixed manufacturing overhead is

Solution: Inventoriable

Explanation: In three inventory accounts the labeling of inventoriable costs on the balance sheetis the similar as used under absorption costing. Under absorption costing, inventory on the balance sheet includes unsold units times the variable product cost per unit