Assume that a manufacturing company incurred the following costs: Direct labor $ 90,000 Advertising $ 40,000...
Assume that a manufacturing company incurred the following costs:
| Direct labor | $ | 90,000 | |
| Advertising | $ | 40,000 | |
| Factory supervision | $ | 32,000 | |
| Sales commissions | $ | 15,000 | |
| Depreciation, office equipment | $ | 4,000 | |
| Indirect materials | $ | 5,000 | |
| Depreciation, factory building | $ | 20,000 | |
| Administrative office salaries | $ | 1,000 | |
| Utilities, factory | $ | 2,500 | |
| Direct materials | $ | 102,000 | |
| Insurance, factory | $ | 7,000 | |
| Property taxes, factory | $ | 7,000 | |
If the information above pertains to 1,000 units of production,
what is its average manufacturing cost per unit?
Homework Answers
Manufacturing cost includes all the manufacturing or factory related expenses. Expenses of office & administration overheads and selling expenses are not part of manufacturing cost. First we will calculate the total manufacturing cost as per below:
Manufacturing cost statement:
| Description | Amount |
| Direct materials | $102000 |
| Direct labor | $90000 |
| Factory supervision | $32000 |
| Indirect material | $5000 |
| Depreciation, factory building | $20000 |
| Utilities, factory | $2500 |
| Insurance factory | $7000 |
| Property taxes factory | $7000 |
| Total manufacturing cost | $265500 |
Total manufacturing cost of 1000 units = $265500
Average manufacturing cost per unit = $265500 / 1000 = $265.5
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Assume that a manufacturing company incurred the following
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90,000
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furniture consisting of a table and four chairs. The set enjoys
great popularity, and the company has ample orders to keep
production going at its full capacity of 2,000
sets per year. Annual cost data at full capacity follow:
The patio sets are normally sold for $400 per set. Dial can
increase capacity by 1,000 units to 3,000 units but must pay
$50,000 to do so.
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Factory utilities
$15,600
Direct labor
$69,400
Depreciation on factory equipment
13,050
Sales salaries
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Property taxes on factory building
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Your answer is incorrect. Try again.
Determine the total amount of manufacturing overhead....
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