Question
Earhart Instruments, Inc., produces calculators. For next year, Earhart predicts that 50,000 units will be produced, with the following total costs: Direct materials $130,000 Direct
Earhart Instruments, Inc., produces calculators. For next year, Earhart predicts that 50,000 units will be produced, with the following total costs:
Direct materials | $130,000 |
Direct labor | 50,000 |
Variable overhead | 25,000 |
Fixed overhead | 220,000 |
1. Calculate the prime cost per unit. 3.6
2. Calculate the conversion cost per unit. 5.9
3. Calculate the total variable cost per unit. 4.1
4. Calculate the total product (manufacturing) cost per unit. 8.5
5. What if the number of units increased to 55,000 and all unit variable costs stayed the same? Indicate whether the following costs would increase, decrease, or stay the same:
a. Total direct materials
b. Total direct labor
c. Total variable overhead
d. Total fixed overhead
e. Unit prime cost
f. Unit conversion cost
I need part 5 answered please.
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