Question

Kaspar Corporation makes a commercial-grade cooking griddle. The following information is available for Kaspar Corporation's anticipated annual volume of 26,700 units.

Per Unit Total
Direct materials $20
Direct labor $6
Variable manufacturing overhead $14
Fixed manufacturing overhead $453,900
Variable selling and administrative expenses $5
Fixed selling and administrative expenses $186,900
The company uses a 41% markup percentage on total cost.

Compute the total cost per unit.

Total cost per unit $____________________

Answer 1

Answer:

$69 per unit

Explanation:

The computation of the total cost per unit is shown below:

Total cost per unit = Direct material + Direct labor + Variable manufacturing overhead + Fixed manufacturing overhead + Variable selling expenses + Fixed selling expenses

where,

Fixed manufacturing overhead per unit = Total fixed manufacturing overhead ÷ Number of units

= $453,900 ÷ 26,700 units

= $17 per unit

And,

Fixed selling and administrative expenses per unit is

= Total Fixed selling and administrative expenses ÷ Number of units

= $186,900 ÷ 26,700

= $7 per unit.

The other items per unit would remain the same

= $20 + $6 + $14 + $17 + $5 + $7

= $69 per unit