Reference no: EM132758752

Peggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. There are no spending or efficiency variances. Other information for the month includes:

Direct labor costs$10.00 per unit

Direct material costs$20.00 per unit

Variable manufacturing OH$5.00 per unit

Variable marketing costs$ 3.00 per unit

Fixed manufacturing OH$ 7.00 per unit

Administrative expenses, all fixed$15.00 per unit

Problem 1: What is cost of goods sold per unit using variable costing?

Group of answer choices

Option 1: $35

Option 2: $42

Option 3: $38

Option 4: $20