Case - Hospital Supply, Inc.

Hospital Supply Inc. produces and sells hydraulic hoists that are used by hospitals to move bedridden patients. The costs per unit of manufacturing and selling a hydraulic hoist, at the company's normal volume of 3,000 units per month are as follows:

Manufacturing Costs: Direct materials (variable) $550 Direct labour (variable) 825 Variable overhead 420 Fixed overhead 660 Total manufacturing costs per unit $2,455 Selling Costs: Variable 275 Fixed 770 Total selling costs per unit $1,045 Total costs per unit $3,500