Question

Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity: $ 1,088,000 2,079,000 250,000 212,000 Variable costs: Direct materials used Direct labor Indirect materials and supplies Power to run plant equipment Fixed costs: Supervisory salaries Plant utilities (other than power to run plant equipment) Depreciation on plant and equipment (straight-line, time basis) Property taxes on building 900,000 282,000 143,000 193,000 Required: Unit variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unit cost and the total cost if 21,000 units are produced next month. (Round "Unit co Total variable costs Total fixed costs Total costs Unit costs

Answer 1

Direct materials cost per unit = Total direct material cost / Number of units

= 1,088,000/15,000

= $72.5333333

Total direct material cost of 21,000 units

= Direct materials cost per unit x 21,000

= 72.5333333 x 21,000

= $1,523,200

Direct labor cost per unit = Total direct labor cost / Number of units

= 2,079,000/15,000

= $138.60

Total direct labor cost of 21,000 units

= Direct labor cost per unit x 21,000

= 138.60 x 21,000

= $2,910,600

Direct indirect materials and supplies cost per unit = Total indirect material and supplies cost / Number of units

= 250,000/15,000

= $16.6666667

Total indirect material and supplies cost of 21,000 units

= Direct indirect materials and supplies cost per unit x 21,000

= 16.6666667 x 21,000

= $350,000

Power to run plant equipment cost per unit = Total power to run plant equipment cost / Number of units

= 212,000/15,000

= $14.1333333

Total power to run plant equipment cost of 21,000 units

= power to run plant equipment cost per unit x 21,000

= 14.1333333 x 21,000

= $296,800

Total fixed costs of producing 15,000 units = Supervisory salaries + Plant utilities + Depreciation on plant and equipment +Property taxes on building

= 900,000+282,000+143,000+193,000

= $1,518,000

When output is increased to 21,000 units, Total fixed costs will remains same i.e.$1,518,000

Total variable cost = Direct materials + Direct labor + Indirect material + Power to run plant equipment

= 1,523,200+2,910,600+350,000+296,800

= $5,080,600

Total cost = Total fixed costs + Total variable costs

= 1,518,000+5,080,600

= 6,598,600

Unit cost = Total costs/Number of units

= 6,598,600/21,000

= $314.22

Total variable costs	$5,080,600
Total fixed costs	$1,518,000
Total costs	$6,596,600
Unit costs	$314.22

Kindly comment if you need further assistance.

Thanks‼!