aturna Ltd. (2017 exam)

Using the data below, estimate the direct material production costs per unit for 2021.

Be careful to think about the verbs since production levels often do not equal to sales levels.

Selling price per unit is $70.

Ending inventory each year is zero.

Production capacity is #20,000 per year.

Inflation is zero.

It is a several week warranty.

Year 2018Year 2019Year 2020REVENUE$896,000$1,085,000$1,204,000Direct Materials234,000288,000324,000Factory & Equipment Lease150,000150,000150,000Utilities59,00068,00074,000Selling and Administration242,400264,000277,600Maintenance65,00080,000123,000Legal Fees023,00011,000Direct Labour78,00096,000108,000Patent Amortization030,00030,000 Profit67,60086,000106,400Warranty: faulty items sold are replaced within a few weeks200500

800

Group of answer choices

18.11 to 18.30

18.61 to 18.99

18.31 to 18.60

19.00 to 19.50

17.80 to 18.10

19.51 to 19.99