Question
Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts for the previous quarter and have provided an
Summit Corporation manufactures machines for the apparel industry. The production manager and cost analyst reviewed the accounts for the previous quarter and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhead: Fixed Variable Total Administration and supervision $ 30,450 $ 9,500 $ 39,950 Engineering and indirect labor 5,700 58,900 64,600 Indirect supplies 7,600 26,600 34,200 Facilities cost 133,000 11,400 144,400 Repair and maintenance 57,900 76,000 133,900 Total $ 234,650 $ 182,400 $ 417,050 Direct materials for the quarter amounted to $351,500. Direct labor for the quarter was $712,500. During the quarter, 9,500 units were produced. Required: No changes are expected in these cost relations next quarter. The firm has budgeted production of 12,350 units. Provide an estimate for total production cost for next quarter. Determine the cost per unit of production for the previous quarter and the estimated cost per unit next quarter.
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