Kray Inc., which produces a single product, has provided the following data for its most recent month of operations: Number of units produced 6,000 Variable costs per unit: Direct materials$40 Direct labor$19 Variable manufacturing overhead$8 Variable selling and administrative expense$2 Fixed costs: Fixed manufacturing overhead$144,000 Fixed selling and administrative expense$198,000 There were no beginning or ending inventories. The variable costing unit product cost was:

The variable costing unit product cost was $69.

Explanation:

Variable Product Costing is a situation whereby only the variable costs of production is taking into account to estimating the cost per unit of a product. This implies that none of the fixed cost will be included in the cost of the product.

Based on the explanation above, the variable costing unit product cost to produce a single product by Kray Inc. can be calculated as follows:

Kray Inc.

Calculation of Variable Costing Unit Product Cost

Particulars                                                          Amount ($)    

Direct materials                                                        40

Direct labor                                                               19

Variable manufacturing overhead                           8

Variable selling and administrative expense         2      

Variable cost per unit                                               69    

Therefore, the variable costing unit product cost was $69.

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711.