St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst reviewed the
Question:
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$4,600$9,600$14,200Indirect labor2,80016,80019,600Supervision10,6003,80014,400Depreciation37,6005,60043,200Maintenance17,60022,60040,200Total$73,200$58,400$131,600
Direct materials for the month amounted to $105,500. Direct labor for the month was $200,500. 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.
Expert Answer:
a To estimate the total production cost for next month we need to calculate the total manufacturing overhead cost and add it to the direct materials a... View the full answer
