Question

Product Costs

Pietro Frozen Foods, Inc., produces frozen pizzas. For next year, Pietro predicts that 50,000 units will be produced, with the following total costs:

Direct materials	$110,000
Direct labor	70,000
Variable overhead	25,000
Fixed overhead	220,000

Required:

If required, round your answers to the nearest cent.

1. Calculate the prime cost per unit.
$    per unit

2. Calculate the conversion cost per unit.
$ per unit

3. Calculate the total variable cost per unit.
$    per unit

4. Calculate the total product (manufacturing) cost per unit

$    per unit

What if the number of units increased to 55,000 and all unit variable costs stayed the same? indicate the impact on the following costs.

What would the product cost per unit be in this case?

$    per unit

Answer 1