I am little confused in these two problems:;
Vane Co produced and sold 10,000 units of a product and expenses are following
DM and DL 400,000
Variable Selling cost 10,000
The product's unit cost under Variable Costing was
Ans choice is $49 which doesn't include Variable Selling cost
In an income statement prepared as an internal report using variable costing method, Variable selling and administrative exp are
a. not used
b. treated the same as fixed S& A exp
c. used in the computation of operating income but not in the computation of CM
d. used in the computation of the contribution margin
Ans choice is D.
Under variable costing we consider product cost as DM DL VOH and VSA,my question is why didn't we include variable selling cost in the computation of product unit cost in 1st problem. While 2nd problem says that we include VSA in the computation of CM.
Can you guys make it clear when we include VSA in product cost and when not.