MFG Company experiences the following cost behavior patterns each week: Fixed co

Question

MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor’s salary $2,600; factory rent $5,700 Mixed costs: utilities $3,100 + $9.25 per unit Variable costs per unit: manufacturing labor wages $28.00; supplies used in production $12.50; packaging cost $6.25; warranty cost $4

Required: Compute total costs to be incurred for a week with 2,910 units of activity. (Do not round intermediate calculations.)

MFG Company experiences the following cost behavior patterns each week: Fixed costs: supervisor's salary $2,600; factory rent $5,700 Mixed costs: utilities $3,100 $9.25 per unit Variable costs per unit: manufacturing labor wages $28.00; supplies used in production $12.50; packaging cost $6.25; warranty cost $4 Required: Compute total costs to be incurred for a week with 2,910 units of activity. (Do not round intermediate calculations.) Total cost

Explanation / Answer

Calculate total cost :

Variable cost per unit = (28+12.50+6.25+4) = 50.75 per unit

Variable cost = 50.75*2910 = 147682.5

Mixed cost = (2910*9.25+3100) = 30017.50

Fixed cost = 2600+5700 = 8300

Total cost = (147682.50+30017.50+8300) = 186000

SO total cost is $186000

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