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If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $444,000, what...

If variable manufacturing costs are $8 per unit and total fixed manufacturing costs are $444,000, what is the manufacturing cost per unit if a. 6,000 units are manufactured and the company uses the variable costing concept? $ b. 7,400 units are manufactured and the company uses the variable costing concept? $ c. 6,000 units are manufactured and the company uses the absorption costing concept? $ d. 7,400 units are manufactured and the company used the absorption costing concept?

Solutions

Expert Solution

a.) Units manufactured          6,000
Variable Manufacturing cost per unit                  8
Total Variable Manufacturing Cost        48,000
Under variable costing, only variable manufacturing cost will form part of Manufacturing cost.
Manufacturing cost per unit 8 ( 48,000 / 6,000 )
b.) Units manufactured          7,400
Variable Manufacturing cost per unit                  8
Total Variable Manufacturing Cost        59,200
Under variable costing, only variable manufacturing cost will form part of Manufacturing cost.
Manufacturing cost per unit                  8 ( 59,200 / 7,400 )
C.) Units manufactured          6,000
Variable Manufacturing cost per unit                  8
Total Variable Manufacturing Cost        48,000
Total Fixed manufacturing cost     444,000
Total Manufacturing Cost    492,000
Under absorption costing, both variable manufacturing cost & fixed manufacturing cost will form part of Manufacturing cost.
Manufacturing cost per unit                82 ( 492,000 / 6,000)
d.) Units manufactured          7,400
Variable Manufacturing cost per unit                  8
Total Variable Manufacturing Cost        59,200
Total Fixed manufacturing cost     444,000
Total Manufacturing Cost    503,200
Under absorption costing, both variable manufacturing cost & fixed manufacturing cost will form part of Manufacturing cost.
Manufacturing cost per unit                68 ( 503,200 / 7,400)

ekkarill92 answered 1 year ago
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