Question

Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 27,900 units.

Per Unit Total
Direct materials $16
Direct labor $10
Variable manufacturing overhead $16
Fixed manufacturing overhead $502,200
Variable selling and administrative expenses $6
Fixed selling and administrative expenses $111,600

The company uses a 40% markup percentage on total cost.

Required:
Compute the total cost per unit.

Answer 1

$62.40

Step-by-step explanation:

Cost per unit = Total manufacturing cost + 40 % markup

therefore

Total manufacturing cost = $16 + $10 + $16 + ($502,200 ÷ 27,900)

= $60

Cost per unit = $60 + ($60 x 40 %)

= $62.40

Conclusion

The total cost per unit is $62.40