Computation of Unit Cost
Amp Cool Industries, Inc. manufactures fans for personal use. Department 70 is responsible for assembling the fan. Department 71 packages them for shipment. Keep Cool recently produced 10,000 fans for a national retailer. In fulfilling this order, the department incurred the following costs:
|
|
Department
|
|
|
70
|
71
|
|
Direct materials used
|
$30,000
|
$4,000
|
|
Direct labor
|
8,000
|
2,000
|
|
Overhead
|
5800
|
3,000
|
1. Compute the unit cost for each department.
2. Compute the total unit cost for the national retailer order.
3. ACCOUNTING CONNECTION in The selling price for this order was $10 per unit. W. the selling price adequate? List the assumptions and/or computations upon which you based 30000 0000000. What suggestions would you make to Keep Cool's management about the pricing of future orders?
4. Compute the prime costs and conversion costs per unit for each department.