Nashler Company has the following budgeted variable costs per unit produced: Bud

Question

Nashler Company has the following budgeted variable costs per unit produced: Budgeted fixed overhead costs per month include supervision of $98,000, depreciation of $76,000, and other overhead of $245,000. Prepare a flexible budget for all costs of production for the following levels of production: 160,000 units, 170,000 units, and 175,000 units. What is the per-unit total product cost for each of the production levels from Requirement 1 (Round each unit cost to the nearest cent.) What if Nashler Company's cost of maintenance rose to $0.22 per unit How would that affect the unit product costs calculated in Requirement 2

Explanation / Answer

1.

Direct materials

2.

Per unit production cost

At 160000 units = 11.96per unit

At 170000 units = 11.80 per unit

At 175000 units = 11.73 per unit

3.

If nashier company's cost of maintenance rose to $0.22 per unit then unit product cost at different level of units

At 160000 units = 11.96per unit+0.22 = $12.18 per unit

At 170000 units = 11.80 per unit+0.22 = $12.02 per unit

At 175000 units = 11.73 per unit+0.22 = $11.95 per unit

160000 units 170000 units 175000 units Total cost per unit Total cost per unit Total cost per unit

Direct materials

1152000 7.2 1224000 7.2 1260000 7.2 Direct labor 246400 1.54 261800 1.54 269500 1.54 Variable overhead: Supplies 36800 0.23 39100 0.23 40250 0.23 Maintenance 30499 0.19 32300 0.19 33250 0.19 Power 28800 0.18 30600 0.18 31500 0.18 Fixed costs: Supervision 98000 0.6125 98000 0.5765 98000 0.56 Depreciation 76000 0.475 76000 0.4471 76000 0.4343 Other overhead 245000 1.53125 245000 1.4412 245000 1.40 Total cost 1913499 11.9594 2006800 11.8047 2053500 11.7343

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