Problem:
1. Springfield Manufacturing produces electronic storage devices, and uses the following three part classification for its manufacturing costs: direct materials, direct manufacturing labour, and indirect manufacturing costs. In January, total indirect manufacturing costs for all products was $300 million and was allocated to each product on the basis of the direct manufacturing labour costs of each line. Summary data for January for the most popular electronic storage device the Big Bertha was:
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Big Bertha
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Direct materials costs
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$9,000,000
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Direct manufacturing labour costs
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$3,000,000
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Indirect manufacturing costs
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$8,500,000
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Units produced
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40,000
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Required:
Compute the manufacturing cost per unit for each product produced in January