Requirement 1. Compute the manufacturing cost per unit for each product produced in July . Begin by
Question:
Requirement 1. Compute the manufacturing cost per unit for each product produced in July . Begin by determining the formula needed to calculate the total manufacturing cost per unit. Total manufacturing costs Units produced = Total manufacturing cost per unit Part 2 Using the formula you determined above, calculate the company's total manufacturing cost per unit for each type of product produced in July . (Round your answers to the nearest cent.) Supreme Deluxe Regular Total manufacturing cost per unit produced in July $1.63 $1.19 $0.92 Part 3 Requirement 2. Suppose that, in August , production was million units of Supreme, million units of Deluxe, and million units of Regular. Why might the July information on manufacturing cost per unit be misleading when predicting total manufacturing costs in August ? During July , the company incurred million of manufacturing overhead costs, which includes a $ 30 million fixed cost component that will not fluctuate with changes in monthly production volume. This amount, which has been allocated to the total manufacturing costs of producing each product, affects the total manufacturing cost per unit amounts as calculated in requirement 1. Part 4 Given the production volume increase in August , using the total manufacturing cost per unit amounts calculated for July will result in an accurate estimation of total manufacturing costs for August.