Papillon Co. has determined the following per unit amounts: Direct materials $30 Fixed selling and administrative $60 Direct labor 36 Variable overhead 24 Desired ROI 33 Variable selling and administrative 15 Fixed overhead 45 The cost base using the variable-cost approach is A. $90. B. $135. C. $195. D. $105.

Respuesta :

Answer:

The correct answer is A.

Explanation:

Giving the following information:

Direct materials= $30

Direct labor= $36

Variable overhead= $24

Under the variable costing method, the unit product cost is calculated using the direct material, direct labor, and unitary variable overhead.

Unitary product cost= 30 + 36 + 24= $90

The cost base using the variable-cost approach is $105

Variable-cost approach:

What information do we have?

Direct materials = $30

Fixed selling and administrative = $60

Direct labor = $36

Variable overhead = $24

Desired ROI = 33%

Variable selling and administrative = $15

Fixed overhead = $45

Variable cost per unit = $30 + $36 + $24 + $15

Variable cost per unit = $105

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