Tweety Company manufactures one model of birdbath, which is very popular. Tweety sells all units it produces each month. The relevant range is 0'2,100 units, and monthly production costs for the production of 1,600 units follow. Tweetys utilities and maintenance costs are mixed with the fixed components shown in parentheses.
| Production Costs |
Amount |
| Direct materials |
$ |
2,300 |
| Direct labor |
|
6,900 |
| Utilities ($130 fixed) |
|
590 |
| Supervisors salary |
|
2,800 |
| Maintenance ($290 fixed) |
|
490 |
| Depreciation |
|
850 |
|
Requirement 1:
Express each cost as a rate per month or per unit (or combination thereof).
| Production Costs |
Rate |
|
| Direct materials |
$ |
|
per unit |
|
|
|
| Direct labor |
$ |
|
per unit |
|
|
|
| Utilities |
$ |
|
per month |
$ |
|
per unit |
| Supervisor's Salary |
$ |
|
per month |
|
|
|
| Maintenance |
$ |
|
per month |
$ |
|
per unit |
| Depreciation |
$ |
|
per month |
|
|
|
|
Requirement 2:
Determine the total fixed cost per month and the variable cost per unit for Tweety.
| Total Fixed Cost per Month |
$ |
|
| Total Variable Cost per Unit |
$ |
|