Question
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 42,000 Rets per year. Costs
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 42,000 Rets per year. Costs associated with this level of production and sales are given below:
Unit | Total | ||||||||||||||||||||||
Direct materials | $ | 20 | $ | 840,000 | |||||||||||||||||||
Direct labor | 10 | 420,000 | |||||||||||||||||||||
Variable manufacturing overhead | 3 | 126,000 | |||||||||||||||||||||
Fixed manufacturing overhead | 7 | 294,000 | |||||||||||||||||||||
Variable selling expense | 4 | 168,000 | |||||||||||||||||||||
Fixed selling expense | 6 | 252,000 | |||||||||||||||||||||
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Total cost | $ | 50 | $ | 2,100,000 | |||||||||||||||||||
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