Answer:
Total cost: $ 3,060,000
unit cost: $ 85
Explanation:
We cross multiply the variable cost between 30,000 and 36,000
[tex]\left[\begin{array}{ccc}units&30000&36000\\direct materials&510000&612000\\labor&1120000&1344000\\indirect materials&120000&144000\\power&140000&168000\\total&1920000&2304000\\\end{array}\right][/tex]
Now, we add up the fixed cost:
Supervisory salaries $470,000
Plant utilities (other than power to run plant equipment) $120,000
Depreciation on plant and equipment (straight-line, time basis) $67,500
Property taxes on building $98,500
Total fixed cost: 756000
Total cost: 2,304,000 + 756,000 = 3,060,000
unit cost: 3,060,000 / 36,000 = $85
Answer:
Unit Cost at production level of 36,000 units = $ 84 per unit
Total costs of production at 36,000 units = $ 3,024,000
Explanation:
Unit cost calculations
Variable costs
Direct materials $ 510,000
Direct Labor $ 1,120,000
Indirect materials $ 120,000
Power for plant equipment $ 140,000
Total Variable Costs $ 1,890,000
Unit variable costs for 30,000 units
$ 1,890,000/ 30,000 units $ 63 per unit
Fixed costs
Supervisory salaries $ 470,000
Plant utilities $ 120,000
Depreciation on plant and equipment $ 67,500
Property taxes on building $ 98,500
Total fixed costs $ 756,000
Total costs at production level of 36,000 units shall be:
(Variable costs per unit * No of Units) + Fixed costs
($ 63 * 36.000) + 756,000 = $ 3,024,000
