Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor:

Material A

$16 / pound

10 ounces

Material B

$10 / pound

8 ounces

Material C

$40 / gallon

0.3 gallon

Cutting labor

$18 / hour

30 minutes

Shaping labor

$22 / hour

15 minutes

Finishing labor$24 / hour$45 minutes

Shorewood Manufacturing produces a single product requiring the following directmaterial and direct labor: Cost per Unit of Input Required Amount per Unit of Product Material A $16 / pound 10 ounces Material B $10 / pound 8 ounces Material C $40 / gallon 0.3 gallon Cutting labor $18 / hour 30 minutes Shaping labor $22 / hour 15 minutes Finishing labor $24 / hour $45 minutes Manufacturing overhead consists of indirect material, $0.60 per unit of product; indirect labor, $1,000 per month plus $0.70 per unit of product; factory maintenance, $14,000 per year plus $0.55 per unit of product; factory depreciation, $15,000 per year; and annual factory property taxes, $8,000. Selling and administrative expenses include the salaries of a sales manager, $30,000 per year; an office manager, $18,000 per year; and two salespersons, each of whom is paid a base salary of $11,000 per year and a commission of $3 per unit sold. Advertising and promotion of the product are done through a year-round media package program costing $1,000 per week.

a. Analyze all cost and expense factors to determine a general formula (based on units of production) for total cost. Round variable cost per unit answers to two decimal places, if applicable.

b. Assuming a relevant range of 10,000 to 20,000 units, what is the estimated unit cost for producing and selling 10,000 units? 20,000 units?

- Round answers to two decimal places.

Estimated per unit cost for 10,000 units $Answer

Estimated per unit cost for 20,000 units $Answer

c. If 15,000 units are produced and sold in a year, what selling price results in a net income before taxes of $60,000?

Round answers to two decimal places, if needed.