Homework Answers
COMPUTATION OF TOTAL COST OF PRODUCING 3000 TABLES :
TOTAL VARIABLE COST PER UNIT OF TABLE
= Material cost + labour cost + variable mfg overhead
= $50+$10+$15
= $75.
Therefore
TOTAL VARIABLE COST FOR 3000 TABLES = 3000 × $75 = $225000
TOTAL FIXED MANUFACTURING OVERHEAD FOR 1000 TABLES = 1000 × $30 = $30000
AND, the fixed mfg. Overhead remains same even for 3000 tables
THEREFORE
TOTAL COST OF 30000 TABLES
= VARIABLE COST + FIXED COST
= $225000 + $30000
=$255000.
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