Answer:
The correct answer is B.
Explanation:
Giving the following information:
The company produces a single product.
Production volume 8,500 units 9,500 units
Direct materials $97.70 per unit
Direct labor $27.60
Manufacturing overhead $72.30 per unit $68.30 per unit.
Variable Manufacturing cost= direct material + direct labor + variable manufacturing overhead
<u>Variable Manufacturing overhead:</u>
We need to use the high low method:
Variable cost per unit= (Highest activity cost - Lowest activity cost)/ (Highest activity units - Lowest activity units)
Variable cost per unit= (648,850 - 614,550) / (9,500 - 8,500)= 34.3
Variable Manufacturing cost= 97.7 + 27.6 + 34.3= $159.6