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Please solve all boxes Crackling Soda spends $1 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces.
Please solve all boxes
Crackling Soda spends $1 on direct materials, direct labor, and variable manufacturing overhead for every unit (12-pack of soda) it produces. Fixed manufacturing overhead costs $3 million per year. The plant, which is currently operating at only 85% of capacity, produced 20 million units this year. Management plans to operate closer to full capacity next year, producing 30 million units. Management doesn't anticipate any changes in the prices it pays for materials, labor, and manufacturing overhead. Read the requirements. Requirement 1. What is the current total product cost (for the 20 million units), including fixed and variable costs? Determine the formula, then calculate the current total product cost (for the 20 million units), including fixed and variable costs. Requirement 2. What is the current average product cost per unit? Determine the formula, then calculate the current average product cost per unit. (Enter your answer to the nearest cent.) Current average = product cost per unit million million = per unit Requirement 3. What is the current fixed cost per unit? Determine the formula, then calculate the current fixed cost per unit. (Enter your answer to the nearest cent.) millionmillion=Currentfixedcostperunitperunit Requirement 4. What is the forecasted total product cost next year (for the 30 million units), including fixed and variable costs? Determine the formula, then calculate the forecasted total product cost next year (for the 30 million units). Requirement 5. What is the forecasted average product cost next year? Determine the formula, then calculate the forecasted average product cost per unit. (Enter your answer to the nearest cent.) Requirement 6. What is the forecasted fixed cost per unit? Determine the formula, then calculate the forecasted fixed cost per unit. (Enter your answer to the nearest cent.) Requirement 7. Why does the average product cost decrease as production increases? The average product cost decreases as production volume increases because the company is over 10 million more units. The company will be operating efficiently, so the average cost of making each unit decreases. adding more fixed costs spreading its fixed costs spreading its variable costs less moreStep by Step Solution
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