Music Co. and wa based on monthly demand and sales of 100 units: Per-Unit Costs

Question

Music Co. and wa based on monthly demand and sales of 100 units: Per-Unit Costs cost information pertained to the Violin Division of Stringing Music Variable production costs: $120 Direct materials Direct labor Variable factory overhead Fixed production costs: 20 Depreciation (equipment) Factory rent Other 48 Total production cost Variable selling & administrative costs $24 per uni Fixed selling & administrative costs $36 per unit $410 Assume that the Violin Division was evaluating whether or not it would accept a special sales order for 10 violins at $390 per unit. For this purpose, total relevant cost per unit (given the costs stated above) is: A $330 B. $342 C. $390 D. $366 E. $354

Explanation / Answer

Calculate relevant cost per unit :

So answer is e) $354

Direct material 120 Direct labour 150 Variable factory overhead 60 Variable selling and administrative 24 Total relevant cost per unit 354

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