Item11

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Item 11

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	$	3,600			$	8,600			$	12,200
Indirect labor		2,300				16,300				18,600
Supervision		9,600				3,300				12,900
Depreciation		36,600				4,600				41,200
Maintenance		16,600				21,600				38,200
Total	$	68,700			$	54,400			$	123,100

Direct materials for the month amounted to $100,500. Direct labor for the month was $195,500. 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.