ci Computing and interpreting manufacturing unit costs. Direct material cost Direct manuf. labor costs Indirect manuf....

 

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ci Computing and interpreting manufacturing unit costs. Direct material cost Direct manuf. labor costs Indirect manuf. costs Total manuf. costs Fixed costs allocated at a rate of $20M+$50M (direct mfg. labor) equal to $0.40 per dir. manuf labor dollar (0.40 × $14; 28; 8) Variable costs Units produced (millions) Cost per unit (Total manuf. costs units produced) Variable manuf. cost per unit (Variable manuf. costs +Units produced) X Based on total manuf. cost per unit ($1.75x120; $1.3833x160; $0.94 x 180) Correct total manuf. costs based on variable manuf. costs plus fixed costs equal Variable costs ($1.68 × 120; $1.29 x 160; $0.908 × 180) Fixed costs Total costs Supreme S 84.00 14.00 42.00 $140.00 5.60 $134.40 80 $1.7500 $1.6800 Supreme $210.00 $201.60 (in millions) Deluxe $ 54.00 28.00 $4.00 $166.00 11.20 $154.80 120 $1.3833 $1.2900 (in millions) Deluxe $221.33 $206.40 Regular $ 62.00 $.00 24.00 $ 94.00 3.20 $ 90.80 100 $0.9400 $0.9080 Total $200.00 50.00 150.00 $400.00 20.00 $380.00 Regular Total $163.44 $169.20 $600.53 $571.44 20.00 $591.44 The total manufacturing cost per unit in requirement 1 includes $20 million of indirect manufacturing costs that are fixed irrespective of changes in the volume of output per month, while the remaining variable indirect manufacturing costs change with the production volume. Given the unit volume changes for August 2007, the use of total manufacturing cost per unit from the past month at a different unit volume level (both in aggregate and at the individual product level) will yield incorrect estimates of total costs of $600.53 million in August 2007 relative to the correct total manufacturing costs of $591.44 million calculated using variable manufacturing cost per unit times units produced plus the fixed costs of $20 million ci Computing and interpreting manufacturing unit costs. Direct material cost Direct manuf. labor costs Indirect manuf. costs Total manuf. costs Fixed costs allocated at a rate of $20M+$50M (direct mfg. labor) equal to $0.40 per dir. manuf labor dollar (0.40 × $14; 28; 8) Variable costs Units produced (millions) Cost per unit (Total manuf. costs units produced) Variable manuf. cost per unit (Variable manuf. costs +Units produced) X Based on total manuf. cost per unit ($1.75x120; $1.3833x160; $0.94 x 180) Correct total manuf. costs based on variable manuf. costs plus fixed costs equal Variable costs ($1.68 × 120; $1.29 x 160; $0.908 × 180) Fixed costs Total costs Supreme S 84.00 14.00 42.00 $140.00 5.60 $134.40 80 $1.7500 $1.6800 Supreme $210.00 $201.60 (in millions) Deluxe $ 54.00 28.00 $4.00 $166.00 11.20 $154.80 120 $1.3833 $1.2900 (in millions) Deluxe $221.33 $206.40 Regular $ 62.00 $.00 24.00 $ 94.00 3.20 $ 90.80 100 $0.9400 $0.9080 Total $200.00 50.00 150.00 $400.00 20.00 $380.00 Regular Total $163.44 $169.20 $600.53 $571.44 20.00 $591.44 The total manufacturing cost per unit in requirement 1 includes $20 million of indirect manufacturing costs that are fixed irrespective of changes in the volume of output per month, while the remaining variable indirect manufacturing costs change with the production volume. Given the unit volume changes for August 2007, the use of total manufacturing cost per unit from the past month at a different unit volume level (both in aggregate and at the individual product level) will yield incorrect estimates of total costs of $600.53 million in August 2007 relative to the correct total manufacturing costs of $591.44 million calculated using variable manufacturing cost per unit times units produced plus the fixed costs of $20 million

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Supreme Deluxe Regular Total Direct material cost 8400M 5400... View the full answer