Baughn Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price

Units in beginning inventory O

Units produced

Units sold

$ 115

6,600

6,400

Units in ending inventory 200

Variable costs per unit:

Direct materials

Direct labor

Variable manufacturing overhead

$ 26

$ 46

$ 7

Variable selling and administrative expense $ 9

Fixed costs:

Fixed manufacturing overhead

$ 105,600

Fixed selling and administrative expense $ 51,200

What is the unit product cost for the month under variable costing?

To calculate the unit product cost for the month under variable costing, we consider only the variable costs associated with producing each unit. Under variable costing, we do not include fixed manufacturing overhead in the unit product cost.

### Given Data:
- **Direct materials** per unit: $26
- **Direct labor** per unit: $46
- **Variable manufacturing overhead** per unit: $7

These are the variable production costs, so the unit product cost under variable costing is the sum of these three amounts.

### Step-by-Step Calculation:

1. **Calculate the variable cost per unit:**
   \[
   \text{Unit Product Cost} = \text{Direct materials} + \text{Direct labor} + \text{Variable manufacturing overhead}
   \]
   \[
   = 26 + 46 + 7
   \]
   \[
   = 79
   \]

### Answer:
The **unit product cost under variable costing** is **$79**.

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Here are 5 related questions that expand on this concept:
1. What is the total variable cost of goods sold (COGS) for the month?
2. How would the unit product cost change under absorption costing?
3. What is the impact of ending inventory on total profit under variable costing?
4. How would fixed costs per unit be calculated under absorption costing?
5. How do selling and administrative expenses affect net income under variable costing?

**Tip:** Under variable costing, only variable production costs are included in the unit product cost. This method is useful for internal decision-making because it highlights the cost behavior related to production.

What is the unit product cost for the month under variable costing?

Discover how to calculate the unit product cost under variable costing for Baughn Corporation, which has a selling price of $115, variable costs including direct materials at $26, direct labor at $46, and variable manufacturing overhead at $7. The final unit product cost is determined to be $79.

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