Bellfont Company produces door stoppers. August production costs are below: Door
ID: 2721895 • Letter: B
Question
Bellfont Company produces door stoppers. August production costs are below:
Door Stoppers produced 71,000
Direct material (variable) $20,000
Direct labor (variable) 40,000
Supplies (variable) 20,000
Supervision (fixed) 28,700
Depreciation (fixed) 21,700
Other (fixed) 3200
In September, Bellfont expects to produce 100,000 door stoppers. Assuming no structural changes, what is Bellfonts production cost per door stopper for September?
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Explanation / Answer
Direct material (variable) $20,000 * 1,00,000 / 71,000 = 28,169
Direct labor (variable) 40,000 * 1,00,000 / 71,000 = 56,338
Supplies (variable) 20,000 * 1,00,000 / 71,000 = 28,169
Supervision (fixed) 28,700
Depreciation (fixed) 21,700
Other (fixed) 3200
TOTAL PRODUCTION COST = 1,66,276
Bellfonts production cost per door stopper for September = 1,66,276 / 1,00,000 = $1.67
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