Question

Lima Company manufactured 30,000 units of product last month and identified the following costs associated with the manufacturing activity:
Variable costs:
Direct materials used. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 510,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,120,000
Indirect materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120,000
Power to run plant equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140,000
Fixed costs:
Supervisory salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 465,000
Plant utilities (other than power to run plant equipment) . . . . . . . . . 110,000
Depreciation on plant and equipment (straight-line, time basis) . . . 67,500
Property taxes on building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97,500

Required
Unit variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unit cost and the total cost if 25,000 units are produced next month.



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  • CreatedDecember 18, 2013
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