Question

The Dockery Corporation had the following costs to produce 3,600 units: (a) direct materials $4,000, (b) factory rent $6,000, (c) fixed advertising $8,000, (d) factory worker wages $12,800 and (e) factory utilities $500. What was the company's variable cost per unit? As needed, round your final answer to the nearest penny. The McShera buys mixing machines for $90 each and sells them for $220 each. The company projected the following sales in units March April May June 5,500 6,000 5,200 5,000 Inventory on March 1st was 800 units and the company wants to maintain ending inventory at 15% of the next month's projected sales volume. What total dollar amount of purchases would be budgeted for May?

Answer 1

Cost per unit $8.69 and in the mixing machine the budgeted will be $70, 200.

Step-by-step explanation:

Since you have all the cost of the different entrances of your product, you need to add them and divide it in the total quantity of units to know the amount of cost per unit.

$4000 + $6000 + $8000 + $12800 + $500 = $31 300

divided the total cost into the number of units: $31 300 / 3600 units = $8.69

In the mixing machines, per each machine the gain is $130 because the company buy each machine in $90 and sell it into $220, so the difference is the gain.

In May the proyection is to sell 5200, if the company want to have 15 % in inventory that will be 780 units (5200 x 0.15)

If the company needs to invest $90 per each unit, so the budget need to be $90 x 780 units = $70 200

Hope this info was useful