Question
Can someone please help me on this question? I would need help with step by step and why you are doing what you are doing.
Can someone please help me on this question? I would need help with step by step and why you are doing what you are doing.
Minnesota Office Products (MOP) produces three different paper products at its Vaasa lumberplant: Supreme, Deluxe, and Regular. Each product has its own dedicated production line at theplant. It currently uses the following three-part classification for its manufacturing costs: directmaterials, direct manufacturing labor, and manufacturing overhead costs. Total manufacturingoverhead costs of the plant in July 2014 are $150 million ($15 million of which are fixed). Thistotal amount is allocated to each product line on the basis of the direct manufacturing labor costsof each line. Summary data (in millions) for July 2014 are as follows:SupremeDeluxeRegularDirect material costs$ 89$ 57$ 60Direct manufacturing labor costs$ 16$ 26$ 8Manufacturing overhead costs$ 48$ 78$ 24Units produced125150140Required:1.Compute the manufacturing cost per unit for each product produced in July 2014.2.Suppose that, in August 2014, production was 150 million units of Supreme, 190 millionunits of Deluxe, and 220 million units of Regular. Why might the July 2014 information onmanufacturing cost per unit be misleading when predicting total manufacturing costs inAugust 2014?
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