(Appendix 5A)Wienecke Corporation Manufactures and Sells One Product

question 38

Multiple Choice

(Appendix 5A) Wienecke Corporation manufactures and sells one product.The following information pertains to the company's first year of operations: The company does not have any variable manufacturing overhead costs or variable selling and administrative costs.During its first year of operations, the company produced 44, 000 units and sold 41, 000 units.The company's only product is sold for $239 per unit. Assume that the company uses a variable costing system that assigns $16 of direct labor cost to each unit that is produced.The unit product cost under this costing system is:

• A)$104 per unit
• B)$174 per unit
• C)$88 per unit
• D)$213 per unit

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Definitions:

Direct Labor Cost

The total cost of wages for labor directly involved in the production of goods or services.

Direct Labor Wage Rate

The rate of pay for workers who are directly involved in the production of goods or the provision of services.

Finished Goods

Products that have completed the manufacturing process and are ready to be sold to customers.

Selling and Admin. Expense

Costs that are not directly tied to the production of goods or services but are necessary for selling products and managing the business.