In: Accounting
Columbia Products
produced and sold 1,400 units of the company’s only product in
March. You have collected the following information from the
accounting records:
Sales price (per unit) | $ | 133 |
Manufacturing costs: | ||
Fixed overhead (for the month) | 16,800 | |
Direct labor (per unit) | 10 | |
Direct materials (per unit) | 33 | |
Variable overhead (per unit) | 24 | |
Marketing and administrative costs: | ||
Fixed costs (for the month) | 21,000 | |
Variable costs (per unit) | 4 | |
Required:
a. Compute the following:
|
1. Variable Manufacturing cost per unit
Direct Labour 10
Direct Materials 33
Variable Overhead 24
Total Variable Manufacturing cost per unit = ( 10 +33 +24 ) 67
Note: Variable manufacturing overhead include Direct Labour, Direct Material and Variable Overhead
2. Full cost per unit
Full cost per unit will include Variable cost per unit as well as Fixed costs per unit
Manufacturing Costs
Fixed Overhead per unit 16800/1400 = 12
Dierct Labour 10
Direct Material 33
Variable Overhead 24
Marketing and Administrative cost
Fixed Costs 21000/1400 15
Variable cost 4
Full cost per unit 98
3. Variable Cost per unit
Direct Labour 10
Direct Material 33
Variable Manufacturing cost 24
Variable Marketing and Administrative cost 4
Total Variable cost 71
4. Full absorption cost per unit
All variable and fixed manufacturing cost per unit would be taken into account
Direct Labour 10
Direct Material 33
Manufacturing Variable Overhead 24
Manufacturing Fixed Overhead 16800/1400 12
Full absorption cost per unit 79