Dayton, Inc. manufactured 30,000 units of product last month and identified the

Question

Dayton, Inc. manufactured 30,000 units of product last month and identified the following costs associated with the manufacturing activity Variable costs Direct materials used Direct labor Indirect materials and supplies Power to run plant equipment S 510,000 1,120,000 120,000 140,000 Fixed costs: Supervisory salaries Plant utities (other than power to run plant equipment) Depreciation on plant and equipment (straight-line, time basis) Property taxes on building 470,000 120,000 67,500 98,500 Required Uni variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unt eost and the total cost if 36,000 units are produced next month. Total variable costs Total fixed costs Total costs Unit costs

Explanation / Answer

Total variable cost for 30000 units = 510000+1120000+120000+140000 = 1890000

Per unit variable cost = total variable costs / 30000 units = 1890000/30000 = $63 per unit

Variable costs for 36000 units = 36000 units * variable cost per unit = 36000*$63 = $2268000

Total fixed cost = 470000+120000+67500+98500 = 756000

Total cost for 36000 units = 2268000+756000 = 3024000

Per unit cost = total costs / 36000 units = 3024000/36000 = $84

Therefore,

Total variable costs 2268000 Total fixed costs 756000 Total costs 3024000 Unit costs 84

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