Question

A small clothing firm currently produces 50,000 shirts and blouses per month. The cost of its factory, raw materials, and labor is $500,000. If it is to increase production by 5,000 and that requires and additional labor and raw material expense of $100,000. What is the cost per shirt of the new shirts produced?a. $5b. $10c. $20d. $50e. $100

Answer 1

Answer:

The correct answer is C: $20

Explanation:

Giving the following information:

Units=  50,000 shirts and blouses per month.

The cost of its factory, raw materials, and labor is $500,000.

Increase in production= 5,000

Additional labor and raw material expense of $100,000.

Cost per shirt= 100000/5000= $20 unit