Question
The new business has new employees who are still being trained. It also has new customer and supplier relationships it is eager to sustain for
The new business has new employees who are still being trained. It also has new customer and supplier relationships it is eager to sustain for the long term. The business is expected to have the following monthly costs for the product in question: Fixed manufacturing costs (unavoidable, solely related to the product): $10,000 Units produced: 5,000 Maximum monthly capacity: 5,600 Cost per direct labour hour: $22 Variable overhead cost per direct labour hour: $6 Direct materials cost per kilogram: $40 Labour hours per unit: 1.10 Direct materials per unit: 1.05 kilograms
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