Question:
A company manufactures golf bags. Golf bags have the following manufacturing costs:
|
|
£ per bag
|
|
Labour (5 hours at £5.00/hour)
|
25
|
|
Materials
|
40
|
|
Variable production overheads
|
10
|
In addition, the company has monthly fixed production overhead costs of £100,000. 5,000 golf bags are manufactured every month.
Required
Prepare a statement of total product cost for a batch of 5,000 golf bags which shows prime cost and production overhead cost as subtotals.