Kaspar Corporation makes a commercial-grade cooking griddle. The following infor

Question

Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 33,900 units.

The company uses a 44% markup percentage on total cost.

1) Total cost per unit

2) Calculate fixed manufacturing overhead per unit

3) Calculate fixed selling and administrative expenses per unit

Per Unit Total Direct materials $17 Direct labor $5 Variable manufacturing overhead $12 Fixed manufacturing overhead $339,000 Variable selling and administrative expenses $6 Fixed selling and administrative expenses $101,700

Explanation / Answer

1)

2)

Fixed manufacturing overhead per unit = Total fixed manufacturing overhead / Number of units anticipated

Fixed manufacturing overhead per unit = $339,000 / 33,900 units

Fixed manufacturing overhead per unit = $10 per unit

3) Fixed selling and administrative expenses per unit = Total fixed selling and administrative expense / Number of units anticipated

Fixed selling and administrative expenses per unit = $101,700 / 33,900 units

Fixed selling and administrative expenses per unit = $3 per unit

Direct material $ 17 Direct labour $    5 Variable manufacturing overhead $ 12 Fixed manufacturing overhead ($339,000/33,900) $ 10 Variable selling and administrative expense $    6 Fixed selling and administrative expense ($101,700/33,900) $    3 Total cost per unit $ 53

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