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Dolan Company produces product A which sells for $9.85 each. Predicted sales for coming year are 500,000 units which need two inspections per unit. They produce a second product, B, which has the expected run of 300,000 units, and needs 4 inspections per unit. Two products needed the same amount of time on factory floor during manufacture. Dolan Company has projected following costs to support expected sales for Product A:

Direct materials for A
$1,625,000
Direct labor for A
750,000
Overhead:
Unit level for A
675,000

Total Product level, to be allocated on number of inspections needed 825,000
Total Facility level, to be allocated on % of time on factory floor 400,000

Compute Dolan's expected unit cost for Product A?

 

Business Management, Management Studies

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