Disco Industries, Inc., manufactures discs for several of the leading recording studios in the United States and Europe. Department 60 is responsible for pressing each disc. Department 61 then packages them for shipment. Disco recently produced 4,000 discs for Vintage Records Company. In fulfilling this order, the departments incurred the following costs:
|
Department
|
60
|
61
|
|
Direct materials used
|
$29,440
|
$3,920
|
|
Direct labor
|
6,800
|
2,560
|
|
Overhead
|
7,360
|
4,800
|
1. Compute the unit cost for each department.
2. Compute the total unit cost for the Vintage Records Company order.
3. Accounting Connection- The selling price for this order was $14 per unit. Was the selling price adequate? List the assumptions and/or computations upon which you based your answer. What suggestions would you make to Disco's man- agement about the pricing of future orders?
4. Compute the prime costs and conversion costs per unit for each department.