Schopp Corporation makes a mechanical stuffed alligator that sings the Martian n

Question

Schopp Corporation makes a mechanical stuffed alligator that sings the Martian national anthem. The following information is available for Schopp Corporation's anticipated annual volume of 486,000 units. Per Unit Total Direct materials $ 6.97 Direct labor $ 10.86 Variable manufacturing overhead $ 14.80 Fixed manufacturing overhead $ 3,013,200 Variable selling and administrative expenses $ 14.03 Fixed selling and administrative expenses $ 1,516,320 The company has a desired ROI of 24 %. It has invested assets of $ 28,504,000 . Compute the total cost per unit.

Explanation / Answer

Answer : Total Cost Per Unit = $ 56.02

Working notes for the above answer is as under

Total Cost per Unit = 27225720/ 486000

= $ 56.02

Compute the total cost per unit Per unit Total = 486000
Units Particular Amount in $ Amount in $ Total Cost Direct material 6.97 3387420 6.97*486000 Direct labor 10.86 5277960 10.86*486000 Variable manufacturing overhead 14.84 7212240 14.84*486000 Fixed manufacturing overhead 6.2 3013200 Variable selling and administrative expenses 14.03 6818580 14.03*486000 Fixed selling and administrative expenses 3.12 1516320 56.02 27225720

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