Estimating costs based on behavior patterns The following informationprovides the amount of cost incurred in August for the cost items indicated. DuringAugust, 8,000 units of the firm’s single product were manufactured.Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,600Factory depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,500Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,200Production supervisor’s salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100Computer rental expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200Maintenance supplies used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800Required:a. How much cost would you expect to be incurred for each of these itemsduring September when 9,600 units of the product are planned for production?b. Calculate the average total cost per unit for the 8,000 units manufactured inAugust. Explain why this figure would not be useful to a manager interested inpredicting the cost of producing 9,600 units in September.
Estimating costs based on behavior patterns The following information
provides the amount of cost incurred in August for the cost items indicated. During
August, 8,000 units of the firm’s single product were manufactured.
Raw materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $41,600
Factory depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40,500
Direct labor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99,200
Production supervisor’s salary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,100
Computer rental expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,200
Maintenance supplies used . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800
Required:
a. How much cost would you expect to be incurred for each of these items
during September when 9,600 units of the product are planned for production?
b. Calculate the
August. Explain why this figure would not be useful to a manager interested in
predicting the cost of producing 9,600 units in September.
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 3 images
