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Xenbe manufactures plastic bottles . The have four operating machines in the factory that operate at 80% capacity. One machine can produce 10 000 plastic

Xenbe manufactures plastic bottles . The have four operating machines in the factory that operate at 80% capacity. One machine can produce 10 000 plastic bottles per month at full capacity. There are four weeks in a month and all bottles are sold in the month of manufacture. Bottles are sold at R5 each.

The following costs are incurred on a monthly basis in the manufacturing of plastic bottles.

  • Plastic purchased per week. R8 000.
  • Wages of machine operators R2 000 per week. There are four operators on duty at any time.
  • Monthly salary of factory supervisor R20 000.
  • Depreciation of machines R6 000 per machine per annum.
  • Water and electricity of R12 000 per month. Must be apportioned according to floor space. (Factory takes up 80% of total floor space).

a) Calculate the variable cost per unit manufactured and the fixed cost per month.

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