Question

Gibbs Corporation produces industrial robots for high-precision manufacturing. The following information is given for Gibbs Corporation. Per Unit Total Direct materials $440 Direct labor $310 Variable manufacturing overhead $ 77 Fixed manufacturing overhead $1,983,600 Variable selling and administrative expenses $ 59 Fixed selling and administrative expenses $ 605,340 The company has a desired ROI of 19%. It has invested assets of $66,330,000. It anticipates production of 3,420 units per year. Collapse question part (a) Compute the cost per unit of the fixed manufacturing overhead and the fixed selling and administrative expenses. Fixed manufacturing overhead $ per unit Fixed selling and administrative expenses $ per unit

Answer 1

Fixed manufacturing overhead per unit = $580 per unit.

Fixed selling and administrative expenses per unit = $177 per unit.

Step-by-step explanation:

Units of production anticipated = 3,420

Fixed manufacturing overhead per unit = Fixed manufacturing overhead ÷ Units of production anticipated = $1,983,600 ÷ 3,420 = $580 per unit.

Fixed selling and administrative expenses per unit = Fixed selling and administrative expenses ÷ Units of production anticipated = $605,340 ÷ 3,420 = $177 per unit.