Question

Andee Company spends $4.69 in variable costs for each product produced. Fixed manufacturing overhead costs are $115,043 a year. This year, they produced 10,000 units. What is the average TOTAL cost per unit produced? Your answer should be input to two decimal places, without using a dollar sign or commas. (HINT: TOTAL cost is made up of fixed costs and variable costs)

Answer 1

The average total cost per unit produced for Andee Company is calculated by adding the total variable costs to the fixed costs, then dividing by the number of units produced. The average total cost per unit is $16.19 to two decimal places.

Step-by-step explanation:

To calculate the average total cost per unit produced, we need to account for both variable costs and fixed costs. First, we calculate the total variable costs by multiplying the variable cost per unit by the total number of units produced. Then we add the fixed manufacturing overhead costs to obtain the total costs. Finally, we divide these total costs by the number of units produced to get the average total cost per unit.

For Andee Company, the variable cost per unit is $4.69, and they have produced 10,000 units. The total variable costs will then be $4.69 * 10,000 units = $46,900. The fixed manufacturing overhead costs are $115,043 per year. Adding these two components gives us the total costs: $46,900 (total variable costs) + $115,043 (fixed costs) = $161,943 total costs. Now, divide the total costs by the number of units produced to obtain the average total cost per unit: $161,943 / 10,000 units = $16.1943, which rounds to $16.19 when expressed to two decimal places.

Answer 2

Cost per unit= $16.194

Step-by-step explanation:

Giving the following information:

Andee Company spends $4.69 in variable costs for each product produced.

Fixed manufacturing overhead costs are $115,043 a year.

Q= 10,000 units.

Total cost= Fixed cost + variabe cost*number of units

Total cost= 115,043 + 4.69*10000= $161,943

Cost per unit= total cost/Q= 161943/10000= $16.194