Cost Behavior and Forecasting
Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the manufacturing activity:
|
Variable costs: |
|
|
Direct materials used |
$ 1,020,000 |
|
Direct labor |
2,240,000 |
|
Indirect materials and supplies |
240,000 |
|
Power to run plant equipment. |
280,000 |
|
Fixed costs: |
|
|
Supervisory salaries |
930,000 |
|
Plant utilities (other than power to run plant equipment) |
220,000 |
|
Depreciation on plant and equipment (straight line, time basis) |
135,000 |
|
Property taxes on building |
195,000 |
Required
Unit variable costs and total fixed costs are expected to remain unchanged next year. Calculate the unit cost and the total cost of 51,000 units are produced next year.