Question

Sully Company provided the following information for last month: Production in units 3,000 Direct materials cost $7,000 Direct labor cost $10,000 Overhead cost $9,600 Sales commission per unit sold $4 Price per unit sold $29 Fixed selling and administrative expense $7,000 There were no beginning and ending inventories. What is Sully's cost of goods sold per unit

Answer 1

$8.87

Step-by-step explanation:

Given that,

Production in units = 3,000

Direct materials cost = $7,000

Direct labor cost = $10,000

Overhead cost = $9,600

Sales commission per unit sold = $4

Price per unit sold = $29

Fixed selling and administrative expense = $7,000

The total manufacturing overhead includes direct labor cost, direct material cost and overhead cost.

Total manufacturing overhead:

= Direct materials cost + Direct labor cost + Overhead cost

= $7,000 + $10,000 + $9,600

= $26,600

Therefore, the cost of goods sold per unit is determined by dividing the total manufacturing overhead by the number of units produced.

Sully's cost of goods sold per uni:

= Total manufacturing overhead ÷ Number of units produced

= $26,600 ÷ 3,000

= $8.87