Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation’s anticipated annual volume of 486,000 units. Per Unit Total Direct materials $ 6.97 Direct labor $ 10.86 Variable manufacturing overhead $ 14.80 Fixed manufacturing overhead $ 3,013,200 Variable selling and administrative expenses $ 14.03 Fixed selling and administrative expenses $ 1,516,320 The company has a desired ROI of 24 %. It has invested assets of $ 28,504,000 . Compute the total cost per unit.
Answer : Total Cost Per Unit = $ 56.02
Working notes for the above answer is as under
| Compute the total cost per unit | |||
| Per unit | Total = 486000 Units |
||
| Particular | Amount in $ | Amount in $ | Total Cost |
| Direct material | 6.97 | 3387420 | 6.97*486000 |
| Direct labor | 10.86 | 5277960 | 10.86*486000 |
| Variable manufacturing overhead | 14.84 | 7212240 | 14.84*486000 |
| Fixed manufacturing overhead | 6.2 | 3013200 | |
| Variable selling and administrative expenses | 14.03 | 6818580 | 14.03*486000 |
| Fixed selling and administrative expenses | 3.12 | 1516320 | |
| 56.02 | 27225720 |
Total Cost per Unit = 27225720/ 486000
= $ 56.02
