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Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with...

Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity: Variable costs: Direct materials used $ 1,096,000 Direct labor 1,938,000 Indirect materials and supplies 241,000 Power to run plant equipment 211,000 Fixed costs: Supervisory salaries 900,000 Plant utilities (other than power to run plant equipment) 299,000 Depreciation on plant and equipment (straight-line, time basis) 147,000 Property taxes on building 194,000 Required: Unit variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unit cost and the total cost if 21,000 units are produced next month. (Round "Unit costs" to 2 decimal places.)

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Answer #1

Variable costs = Direct materilas used + Direct labour + Inirect materials and supplies + Power to run plant equipment

= $1,096,000 + $1,983,000 + $241,000 + $211,000

= $3,531,000

Variable costs per unit = $3,531,000 / 15,000 units

= 235.4

Fixed costs = Supervisory salaries + Plant utilities + Depreciation on palnt and equipment + Property taxes on building

= $900,000 + $299,000 + $147,000 + $194,000

= $1,540,000

Unit cost if 21,000 units are produced next month = Variable cost per unit + (Fixed costs/number of units)

= $235.4 + ($1,540,000 / 21,000)

= 308.73

Total cost if 21,000 units are produced = Variable costs + Fixed costs

= (21,000 * $235.4) + $1,540,000

= $4,943,400 + $1,540,000

= $6,483,400

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