In: Accounting
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?
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) | |||||||