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The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units: Per-Unit
The following cost information pertained to the Violin Division of Stringing Music Co. and was based on monthly demand and sales of 100 units:
Per-Unit Costs | |||||||||||||||||||||
Variable production costs: | |||||||||||||||||||||
Direct materials | $ | 230 | |||||||||||||||||||
Direct labor | 260 | ||||||||||||||||||||
Variable factory overhead | 170 | ||||||||||||||||||||
Fixed production costs: | |||||||||||||||||||||
Depreciation (equipment) | 130 | ||||||||||||||||||||
Factory rent | 158 | ||||||||||||||||||||
Other | 34 | ||||||||||||||||||||
Total production cost | $ | 982 | |||||||||||||||||||
Variable selling & administrative costs | $ | 46 | per unit | ||||||||||||||||||
Fixed selling & administrative costs | $ | 58 | per unit | ||||||||||||||||||
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Assume that the Violin Division was evaluating whether it would accept a special sales order for 65 violins at $500 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is:
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