Question
Cost Formulas Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor: Cost per Unit of Input Required Amount per Unit of
Cost Formulas Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor: Cost per Unit of Input Required Amount per Unit of Product Material A $8 / pound 10 ounces Material B $5 / pound 8 ounces Material C $20 / gallon 0.3 gallon Cutting labor $9 / hour 30 minutes Shaping labor $11 / hour 15 minutes Finishing labor $12 / hour $45 minutes Manufacturing overhead consists of indirect material, $0.60 per unit of product; indirect labor, $1,000 per month plus $0.70 per unit of product; factory maintenance, $14,000 per year plus $0.55 per unit of product; factory depreciation, $15,000 per year; and annual factory property taxes, $8,000. Selling and administrative expenses include the salaries of a sales manager, $30,000 per year; an office manager, $18,000 per year; and two salespersons, each of whom is paid a base salary of $11,000 per year and a commission of $3 per unit sold. Advertising and promotion of the product are done through a year-round media package program costing $1,000 per week. a. Analyze all cost and expense factors to determine a general formula (based on units of production) for total cost. Round variable cost per unit answers to two decimal places, if applicable
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