Question

West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1:

Steel: 100 pounds per unit at $10 per pound
Alloy: 50 pounds per unit at $20 per pound
Direct labor: 0.5 hours per unit at $40 per hour
Overhead: $20 per unit
What is the total cost to produce one fitting?

Answer 1

To calculate the total cost to produce one fitting, combine the costs of steel, alloy, direct labor and overhead which totals $2040.

Step-by-step explanation:

The total cost to produce one fitting at West Partners involves the addition of costs for steel, alloy, direct labor, and overhead. First, steel costs are calculated as 100 pounds at $10 per pound, resulting in $1000. Next, the alloy, capable of withstanding extreme temperatures, costs 50 pounds at $20 per pound, totaling $1000. Direct labor is required for 0.5 hours at $40 per hour, adding up to $20. Finally, the overhead cost per unit is $20. Adding up these figures provides the total cost:

• Steel: 100 pounds × $10/pound = $1000
• Alloy: 50 pounds × $20/pound = $1000
• Direct Labor: 0.5 hours × $40/hour = $20
• Overhead: $20 per unit

Total Cost= Steel + Alloy + Direct Labor + Overhead
= $1000 + $1000 + $20 + $20
= $2040

Therefore, the total cost to produce one fitting is $2040.