Question

​Vipsana's Gyros House sells gyros. The cost of ingredients​ (pita, meat,​ spices, etc.) to make a gyro is​ $2.00. Vipsana pays her employees​ $60 per day. She also incurs a fixed cost of​ $120 per day. Calculate​ Vipsana's total cost per day when she produces 50 gyros using two​ workers?

Answer 1

Total cost $340

Step-by-step explanation:

Total Cost = Direct Materials + Direct Labor + Factory Overhead

Direct materials:

$2 per gyro x 50 gyros = $100

Direct labor:

2 workers at $60 each = $120

Fixed Cost $120

Total cost $340

Unit cost: $340/ 50 gyros = $6.8