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Accounting

Problem

Lima Company manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity:

Variable costs:
Direct materials used	1,032,000
Direct labor	1,942,000
Indirect materials and supplies	238,000
Power to run plant equipment	214,000
Fixed costs:
Supervisory salaries	914,000
Plant utilities (other than power to run plant equipment)	283,000
Depreciation on plant and equipment (straight-line, time basis)	148,000
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.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92740748

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