Question

Christmas Designs produces wrapping paper. In one 24-hour day, they incur the following costs to make 25,000 tubes of wrapping paper: Use 1.5 million square feet of paper for a total cost of $15,000. Use 3,722 oz. of ink for a total cost of $4,700. Use 30,000 square feet of cardboard tubing for a total cost of $2,400. Use 35,000 square feet of plastic wrap for a total cost of $1,520. Use 350 man-hours for a total cost of $7,525. What are the direct material costs for making one tube of wrapping paper?

Answer 1

$0.9448 per unit

Step-by-step explanation:

Total cost of paper $15,000

Total cost of ink $4,700

Total cost of cardboard tubing c $2,400

Total cost of plastic $1,520

Total Cost $23,620

Material Cost per unit = Total Cost / Number of Unit

Material Cost per unit = $23,620 / 25,000 = $0.9448 per unit