French Fragrances Ltd budgeted for 12 000 bottles of perfume Belle
French Fragrances, Ltd. budgeted for 12,000 bottles of perfume Belle during May. The unit cost of Belle was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3).
a. What would be the unit cost if 10,000 bottles were manufactured?
b. What would be the unit cost if 20,000 bottles were manufactured?
c. Explain why a difference occurs in the unit costs.
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