Cost Behavior and Forecasting
Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the manufacturing activity:
|
Variable costs:
|
|
|
Direct materials used
|
$ 1,020,000
|
|
Direct labor
|
2,240,000
|
|
Indirect materials and supplies
|
240,000
|
|
Power to run plant equipment.
|
280,000
|
|
Fixed costs:
|
|
|
Supervisory salaries
|
930,000
|
|
Plant utilities (other than power to run plant equipment)
|
220,000
|
|
Depreciation on plant and equipment (straight-line, time basis)
|
135,000
|
|
Property taxes on building
|
195,000
|
Required
Unit variable costs and total fixed costs are expected to remain unchanged next year. Calculate the unit cost and the total cost of 51,000 units are produced next year.