Question

Sandhill corporation manufactures a single product. montlhly production costs incurred in the manufacturing process are show below for the production of 3900 maintanance costs are mixed costs. the fixed portions of these costs are 387 and 258, respectively.

Production in units 3900
Production cost
Direct materials 9675
Direct labor 27420
Utilities 3702
Property taxes 1290
Indirect labor 5805
Supervisor salaries 2451
Maintanance 1233
Depreciation 3096

Required:
Calculate variable costs per unit, variable cost per unit for utilities and variable cost per unit for maintenance.

Answer 1

variable costs per unit = $10.57

variable cost per unit for utilities = $0.85

variable cost per unit for maintenance = $0.25

Step-by-step explanation:

I believe that the question is incomplete: the missing part is that both utilities and maintenance costs are mixed.

Production in units 3,900

Variable production cost s:

Direct materials $9,675 / 3,900 = $2.4808 per unit

Direct labor $27,420 / 3,900 = $6.9846 per unit

Utilities ($3,702 - $387) / 3,900 = $0.85 per unit

Maintenance ($1,233 - $258) / 3,900 = $0.25 per unit

total variable costs per unit = $10.5654 ≈ $10.57