• 
  

  • Company ABC manufactures a product that requires direct materials costing $20 per unit and direct labor costing $15 per unit.
  • The variable manufacturing overhead is $5 per unit, and fixed manufacturing overhead is $10,000 per month.
  • Selling and administrative expenses amount to $3,000 per month.

• Requirements:

  • Calculate the total manufacturing cost per unit.
  • Determine the total cost of goods manufactured for a production run of 2,000 units.
  • Compute the total cost per unit including selling and administrative expenses.
  • Discuss the implications of the cost analysis for pricing decisions.