Question
MTN Ltd is a manufacturing company that manufactures cell phones. The relevant costs for the month of March 2017, when 25 000 units were produced
MTN Ltd is a manufacturing company that manufactures cell phones. The relevant costs for the month of March 2017, when 25 000 units were produced and 20 000 units were sold, were as follows:
Direct material costs 310 000
Direct labour costs 270 000
Indirect material costs - variable 50 000
Indirect labour costs fixed 72 000
Factory expenses - variable 20 000
Factory expenses - fixed 48 000
Selling expenses - fixed 50 000
Administrative expenses - fixed 70 000
REQUIRED: Calculate the following for the month of March 2017:
a) The prime cost in total and the prime cost per unit
b) The conversion cost in total and the conversion cost per unit
c) Total variable production cost per unit
d) Total fixed manufacturing cost
e) Total non-manufacturing cost
f) The net profit if the 20 000 cell phones were sold at R40 per unit
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