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Bellfont Company produces door stoppers. August production costs are below: Door

ID: 2721895 • Letter: B

Question

Bellfont Company produces door stoppers. August production costs are below:

Door Stoppers produced                    71,000

Direct material (variable)                                            $20,000

Direct labor (variable)                                               40,000

Supplies (variable)                                                      20,000

Supervision (fixed)                                                      28,700

Depreciation (fixed)                                                    21,700

Other (fixed)                                                            3200

In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfonts production cost per door stopper for September?

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Explanation / Answer

Direct material (variable)                                            $20,000 * 1,00,000 / 71,000 = 28,169

Direct labor (variable)                                               40,000 * 1,00,000 / 71,000 = 56,338

Supplies (variable)                                                      20,000 * 1,00,000 / 71,000 = 28,169

Supervision (fixed)                                                      28,700

Depreciation (fixed)                                                    21,700

Other (fixed)                                                            3200

TOTAL PRODUCTION COST =                     1,66,276

Bellfonts production cost per door stopper for September = 1,66,276 / 1,00,000 = $1.67

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