Midlands Refrigeration estimates the costs per unit of a product as:
|
Raw materials |
40 kg @ £2.50 per kg |
|
Production labour |
7 hours machining @ £12 per hour |
|
4 hours finishing @ £7 per hour |
Variable production overhead @ £5 per direct labour hour.
Fixed production overhead of £1,000,000 is based on a production volume of 12,500 units.
Calculate the:
- variable production cost;
- total production cost.