US CMA Part 1 · Chapter 4 · Question 2 of 22
Per-unit costs for a product are: direct materials $14, direct labor $9, variable manufacturing overhead $5, fixed manufacturing overhead $7 and variable selling expense $3. What is the inventoriable cost per unit under variable costing?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) $28
Explanation
Variable (direct) costing inventories only variable manufacturing costs: $14 + $9 + $5 = $28. Fixed manufacturing overhead is a period cost, and variable selling expenses are never inventoried.
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