Explain the calculation of total cost


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 if 51,000 units are produced next year. (Round your answers to 2decimal places. Use unrounded unit cost for the calculation of Total cost. Omit the "$" sign in your response.)

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Accounting Basics: Explain the calculation of total cost
Reference No:- TGS0707681

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