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The Special Widget division manufactures a product called SW for Global Corporation. The plant is a completely autonomous subsidiary that sells SW5 to other subsidiaries
The Special Widget division manufactures a product called SW for Global Corporation. The plant is a completely autonomous subsidiary that sells SW5 to other subsidiaries of Global Corporation, as well as outside companies. At the beginning of the year the controller for Special Widget estimates sales and unit costs based on projections from past quarters' data. Projected sales for the quarter are 11,000 units and budgeted unit costs are as follows: Direct costs Unit Costs Raw materials [10 lbs at 553.00!le $30.00 Direct Labor (.5 hours at $12fhour) $6.00 Total direct cost per unit $36.00
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