Friday Night, Inc. manufactures high-quality 5-liter boxes of wine which it sells for $14 per box. Below
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Question:
Budgeted Fixed Days of Hours ofDenominator-Level Manufacturing Production Production BoxesCapacity Concept Overhead per Period per Period per Day per HourTheoretical capacity $4,000,000 362 22 300Practical capacity $4,000,000 310 16 250Normal capacity $4,000,000 310 16 175Master budget capacity $4,000,000 310 16 200
Production during 2019 was 990,000 boxes of wine, with 15,000 remaining in ending inventory at 12/31/19. Actual variable manufacturing costs were $1,762,200 (there are no variable cost variances). Actual fixed manufacturing overhead costs were $4,000,000, the same as budgeted. What is the total cost per unit (box of wine) when practical capacity is used?
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