accounting class help

[ebrunn 10+ year member]

Carbert Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product.

Production Volume........... 4,000 units 5,000 units

Direct Materials................ $45.70 per unit $45.70 per unit

Direct Labor..................... $40.70 per unit $40.70 per unit

Manufacturing overhead.. $134.80 per unit $110.70 per unit

The best estimate of the total cost to manufacture 4,300 units would be?

Any help on how I can solve this?

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[JimJ 5,000+ posts]

Figure out the overhead rate.

 

[fasfocus00 5,000+ posts]

$213.97 per unit @ 4300 units

total $920071.00

 

[ebrunn 10+ year member]

How did you figure out the per unit cost?

 

[fasfocus00 5,000+ posts]

you have to figure out how much each unit gets discounted over 4000 to 5000. after you get that you just subtract that from the 4000 unit cost than multiply it by 4300.

 

[blackmax 10+ year member]

Fasfocus is right. unit cost is the given of $45.70 plus $40.70. Then the difference between $134.80 per unit and $110.70 per unit is $24.10. Next subtract 30% or $7.23 off of the 4000 unit Man. overhead price which would be $127.57+45.70+40.70=$213.97 per unit

 

[ebrunn 10+ year member]

Thank you both for the help. Only question I have is where you got the 30%.

 

[blackmax 10+ year member]

5000-4000=1000

4300 units is the same as 300 more than 4000 700 less than 5000 or 30% more than 1000. It would probably work to do it the other way and do 70% of 1000 then add the product of the difference to the $110.70 price. I hope that didn't confuse you more. Accounting is a lot of times ratios or Increases.

Is this Managerial accounting? Ironically I just took my test for Fin. acct. and logged on and saw this post. Thanks for making do another test question lol.

 

[ebrunn 10+ year member]

Thanks, I understand now. Yeah, this is for managerial.

 

[blackmax 10+ year member]

I am glad that makes sense! I can't wait to take man. Act. next semester. My teacher actually said Man. is "more fun" than Fin.

 

[ebrunn 10+ year member]

Just alot more of what you said, ratios, cash flow analysis, and more fun pricing stuff like this.