Scentsation Inc. budgeted for 12,000 bottles of perfume Oui during May. The unit cost of Oui was $20, consisting of direct materials, $7; direct labor, $8; and factory overhead, $5 (fixed, $2; variable, $3).                                                                                              

a. What would be the unit cost if 10,000 bottles were manufactured? (Hint: You must first determine the total fixed costs.)
b. What would be the unit cost if 20,000 bottles were manufactured?
c. Explain why a difference occurs in the unit costs.

Answer rating: 100% (QA)

from the data fixed cost 1 Variable cost per ... View the full answer