Question: Sales price per unit (1 unit = 1 test plus feedback to client) $ 320 Fixed costs (per month): Selling and administration 18,000 Production overhead

Sales price per unit (1 unit = 1 test plus feedback to client)

320

Fixed costs (per month):

Selling and administration

18,000

Production overhead (e.g., rent of testing facilities)

20,000

Variable costs (per test):

Labor for oversight and feedback

170

Outsourced test analysis

Materials used in testing

Production overhead

Selling and administration (e.g., scheduling and billing)

Number of tests per month

500

tests

Required:

Calculate the amount for each of the following (one unit = one test) if the number of tests is 500 per month. Also calculate if the number of tests decreases to 400 per month.

		500 Tests	400 Tests
a.	Variable production cost per unit.
b.	Variable cost per unit.
c.	Full cost per unit.
d.	Full absorption cost per unit.
e.	Prime cost per unit.
f.	Conversion cost per unit.
g.	Contribution margin per unit.
h.	Gross margin per unit.

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