Direct materials ...............................................................

Question

Direct materials....................................................................

$22

Direct labor..........................................................................

14

Variable manufacturing overhead..........................................

27

Fixed manufacturing overhead per month (for up to 1,300 units of production) averages $26,000. Mary Doe, Inc., has offered to purchase 200 motors from John Stag per month to be used in its own outboard motors.

10. Refer to the information above. If Mary Doe's order is rejected, what will be John Stag's average unit cost of manufacturing each motor?

Answer

5 points

5 points

Direct materials....................................................................

$22

Direct labor..........................................................................

14

Variable manufacturing overhead..........................................

27

Explanation / Answer

B) $63.

C) $89.

A) $62.

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