Question

During its first year of operations, Forrest Company paid $44,760 for direct materials and $50,600 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $14,400. General, selling, and administrative expenses were $20,600. The average cost to produce one unit was $5.60. How many units were produced during the period

Answer 1

19,600 units

Step-by-step explanation:

The computation of the number of units produced is shown below:

But before that we need to do the following calculations

The total cost of production is

= Direct materials + Wages + Depreciation

= $44,760 + $50,600 + $14,00

= $107,960

And, the average cost to generate one unit is $5.60

So, the number of units produced is

= Total cost ÷ average cost per unit

= $107,960 ÷ $5.60

= 19,600 units