1. Identify how many units you will produce of your product in one month.
2. Identify the product costs related to the product you have selected to produce. Your list must include a break-out of product costs by direct materials, direct labor, and overhead costs.
3. Please specify if each of your costs is a variable cost or a fixed cost. Use at least four variable costs and at least two fixed costs. You may have more costs depending on the product you selected.
4. For all variable costs listed, please determine the quantity needed for one unit of your product and the cost.
   • For example, to produce one unit of box cake mix, direct materials include flour.It is estimated that one cup of flour is needed per unit of box cake mix. The estimated cost of one cup of flour is $.05 (i.e., $0.20 per pound / 3.94 cups per pound = $0.05 per cup). Flour (Direct Material) = $.05/unit
5. For all fixed costs listed, divide the fixed cost by the number of units you are producing (i.e., the number you determined in #1 above).
6. Calculate your total product cost per unit (i.e., include all variable costs and fixed costs per unit amounts in #4 and #5).