Question
Estimating costs based on behavior patterns. The following information provides the amount of cost incurred in August for the cost items indicated. During August, 8,600(originally
Estimating costs based on behavior patterns. The following information provides the amount of cost incurred in August for the cost items indicated. During August, 8,600(originally was 8,000 by error) units of the firms single product were manufactured.
Raw Materials $41,600
Factory depreciation 40,500
Direct Labor 99,200
Production Supervisor salary 6,100
Computer rental expense 4,200
Maintenance supplies used 800
Required: How much (total) cost would you expect to be incurred for each of these items during September when 9,600 units of the product are planned for production?
Calculate the average total cost per unit for the 8,600 units manufactured in August. Explain why this figure would not be useful to a manager interested in predicting the cost of producing 9,600 units in September?
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