Multiple Choice QuestionDirect materials are $15 per unit; direct labor is $7 per unit and variable overhead costs are $2 per unit. If total product costs are $27, what are fixed costs per unit?Multiple choice question.$30$24$3
Question
Multiple Choice QuestionDirect materials are 7 per unit and variable overhead costs are 27, what are fixed costs per unit?Multiple choice question.24$3
Solution
The total product costs are given as $27 per unit. This cost is made up of direct materials, direct labor, and variable overhead costs.
Step 1: Calculate the total variable costs per unit. Direct materials per unit = 7 Variable overhead costs per unit = 15 + 2 = $24
Step 2: Subtract the total variable costs per unit from the total product costs per unit to find the fixed costs per unit. Fixed costs per unit = Total product costs per unit - Total variable costs per unit Fixed costs per unit = 24 = $3
So, the fixed costs per unit are $3.
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