Question

Earhart Instruments, Inc., produces calculators. For next year, Earhart predicts that 50,000 units will be produced, with the following total costs:

Direct materials	$130,000
Direct labor	50,000
Variable overhead	25,000
Fixed overhead	220,000

1. Calculate the prime cost per unit. 3.6

2. Calculate the conversion cost per unit. 5.9

3. Calculate the total variable cost per unit. 4.1

4. Calculate the total product (manufacturing) cost per unit. 8.5

5. What if the number of units increased to 55,000 and all unit variable costs stayed the same? Indicate whether the following costs would increase, decrease, or stay the same:

a. Total direct materials

b. Total direct labor

   c. Total variable overhead

d. Total fixed overhead

e. Unit prime cost

f. Unit conversion cost

I need part 5 answered please.

Answer 1

5. What if the number of units increased to 55,000 and all unit variable costs stayed the same? Indicate whether the following costs would increase, decrease, or stay the same:

Answer :

a. Total Direct material - Increased

b. Total Direct Laboru - Increased

c. Total Variable cost - Increased

d. Total fixed cost -stay the same

e unit Prime cost - stay the same

f. unit conversion cost - stay the same

because the variable cost remains same at the 55000 units so the above answer is based on it and if the variable cost is same then it will effect in the above manner

answered by: anonymous