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3. Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking
3. Fresh Air Products manufactures and sells a variety of camping products. Recently the company opened a new plant to manufacture a deluxe portable cooking unit. Cost and sales data for the first month of operations are shown below:
Beginning inventory | 0 | units | ||
Units produced | 10,500 | |||
Units sold | 8,700 | |||
Manufacturing costs | ||||
Fixed overhead | $84,000 | |||
Variable overhead | $3 | per unit | ||
Direct labour | $12 | per unit | ||
Direct material | $30 | per unit | ||
Selling and administrative costs | ||||
Fixed | $197,800 | |||
Variable | $3 | per unit sold |
The portable cooking unit sells for $110. Management is interested in the opening months results and has asked for an income statement. Assuming the company uses absorption costing:
(a)
Calculate the manufacturing cost per unit.
Manufacturing cost | $enter the manufacturing cost per unit | per unit |
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