What is the current total product cost (for the 20 million units) including fixed and variable cost?

 

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Great-Cola spends $3 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs $4 million per year. The plant, which is currently operating at only 80% of capacity, produced 20 million units this year. Management plans to operate closer to full capacity next year, producing 25 million units. Management doesn't anticipate any changes in the prices it pays for materials, labor, and manufacturing overhead. Great-Cola spends $3 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs $4 million per year. The plant, which is currently operating at only 80% of capacity, produced 20 million units this year. Management plans to operate closer to full capacity next year, producing 25 million units. Management doesn't anticipate any changes in the prices it pays for materials, labor, and manufacturing overhead.

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