Nestl produces two types of chocolate bars, Milk Chocolate and Dark Chocolate. The following cost data is available: Cost Item Milk Chocolate Dark Chocolate Direct

Nestlé produces two types of chocolate bars, Milk Chocolate and Dark Chocolate. The following cost data is available:

Cost Item	Milk Chocolate	Dark Chocolate
Direct Material	$1/unit	$1.5/unit
Direct Labor	$0.4/unit	$0.6/unit
Overhead	150% of direct labor cost	130% of direct labor cost

Additional Information:

• Production for Milk Chocolate: 1,500,000 units
• Production for Dark Chocolate: 1,000,000 units

Requirements:

1. Calculate the total cost for Milk Chocolate and Dark Chocolate.
2. Determine the cost per unit for each chocolate bar.
3. Prepare a cost sheet for both products.
4. Compare the cost structures and suggest which product is more profitable.
5. Discuss the impact of production volume on unit costs and pricing strategy.