St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst reviewed the

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Question:

St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst reviewed the accounts for the previous month and have provided an estimated breakdown of the fixed and variable

portions of manufacturing overhead.

Fixed Variable Total

Indirect materials $2,000 $7,000 $9,000

Indirect labor 1,500 15,500 17,000

Supervision 8,000 2500 10500

Depreciation 35,000 3,000 38000

Maintenance 15,000 20,000 35,000

Total $61,500 $48,000 $109,500

Direct materials for the month amounted to $92,500. Direct labor for the month was $187,500. During the month, 12,500 units were produced.

Required:

a. No changes are expected in these cost relations next month. The firm has budgeted production of 16,250 units. Provide an estimate for total production cost for next month.

b. Determine the cost per unit of production for the previous month and the next month.