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Q # 5 The estimated unit costs for a company operating at a production and sales level of 12,000 units are as follows: Cost Item

Q # 5

The estimated unit costs for a company operating at a production and sales level of 12,000 units are as follows:

Cost Item

Estimated Unit Cost (Rs.)

Direct materials

32

Direct Labor

20

Variable factory overhead

15

Fixed factory overhead

6

Variable marketing

3

Fixed marketing

4

Required

  1. Identify the estimated conversion cost per unit.
  2. Identify the estimated prime cost per unit.
  3. Determine the estimated total variable cost per unit
  4. Compute the total cost that would be incurred during a month with a production level of 12,000 units and a sales level of 8,000 units.

Q # 5

Fixed and variable costs: In 200A, the Mercaldo Company had sales of Rs. 19,950,000 with Rs. 11,571,000 variable and Rs. 7,623,000 fixed cost. 200B sales are expected to decrease 15% and the cost relationship is expected to remain constant (the fixed cost will not change).

Required: Determine Mercaldo Companys expected operating income of loss for 200B.

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