Exhibit 6-7
Bodega Chocolate,Inc -Refer to Exhibit 6-7

Multiple Choice

Exhibit 6-7
Bodega Chocolate,Inc.is a new company that produces a single product.The company has no beginning inventory.During the year the company produced 10,000 units out of which 9,000 were sold.Below are Bodega's costs:
$\begin{array}{ll}\underline{\text { Variable costs per unit:} } \\\text { Production } & \$ 4.00 \\\text { Selling and administrative } & \$ 2.50\end{array}$


$\begin{array}{ll}\underline{\text { Total fixed costs for the year:}}\\\text {Production}&\$20,700.00\\\text {Selling and administrative}&\$85,000\end{array}$


-Refer to Exhibit 6-7.What is the unit product cost using variable costing?

A) $4.00
B) $6.07
C) $8.57
D) $6.50
E) None of the answer choices is correct.