Question

Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity. Variable costs: Direct materials used $ 1,100,000 Direct labor 1,906,000 Indirect materials and supplies 239,000 Power to run plant equipment 213,000 Fixed costs: Supervisory salaries 947,000 Plant utilities (other than power to run plant equipment) 293,000 Depreciation on plant and equipment (straight-line, time basis) 146,000 Property taxes on building 192,000 Required: Unit variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unit cost and the total cost if 21,000 units are produced next month. (Round "Unit costs" to 2 decimal places.)

Answer 1

unit fixed 75.14

unit variable 230.53

unit total 305.67

total: 6,419,070

Step-by-step explanation:

Variable cost:

Materials:

1,100,000 / 15,000 = 73,33

Labor:

1,906,000/15,000 = 127.0667

variable overhead:

Indrect materials 239,000 + energy on equipment 213,000 = 452000

452,000 / 15,000 = 30.1333

Total Variable: 230.53

Fixed:

947,000 supervisor

293,000 utilities

146,000 depreciation

192,000 property taxes

total 1,578,000

fixed at flexible budget for 21,000

units fixed: 1,578,000 / 21,000 = 75.14

Units cost:

Variable + Fixed = 230.53 + 75.14 = 305.67

Total cost:

305.67 x 21,000 = 6,419,070