Question

Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 30,200 units.

Per Unit Total
Direct materials $ 16
Direct labor $ 7
Variable manufacturing overhead $ 11
Fixed manufacturing overhead $ 422,800
Variable selling and administrative expenses $ 4
Fixed selling and administrative expenses $ 60,400

The company uses a 36% markup percentage on total cost.

Compute the total cost per unit.

Answer 1

$54 per unit

Step-by-step explanation:

The computation of the total cost per unit is shown below:

Direct material per unit $16

Direct labor per unit $7

Variable manufacturing overhead per unit $11

Fixed manufacturing overhead per unit $14 ($422,800 ÷ 30,200 units)

Variable selling and administrative expenses $4

Fixed selling and administrative expenses $2 ($60,400 ÷ 30,200 units)

Total cost per unit is $54

We simply added all the above cost and do not considered markup percentage i.e 36%