Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the
Question:
Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the manufacturing activity:
Variable costs:
Direct materials used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$ 1,020,000
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,240,000
Indirect materials and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000
Power to run plant equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280,000
Fixed costs:
Supervisory salaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 930,000
Plant utilities (other than power to run plant equipment) . . . . . . . . . 220,000
Depreciation on plant and equipment (straight-line, time basis). . . . 135,000
Property taxes on building . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195,000
Required
Unit variable costs and total fixed costs are expected to remain unchanged next year. Calculate the unit cost and the total cost if 51,000 units are produced next year.
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher