A company manufactures golf bags. Golf bags have the following manufacturing costs:
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£ per bag
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Labour (5 hours at £5.00/hour)
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25
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Materials
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40
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Variable production overheads
|
10
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In addition, the company has monthly fixed production overhead costs of £100,000. 5,000 golf bags are manufactured every month.
Required
Prepare a statement of total product cost for a batch of 5,000 golf bags which shows prime cost and production overhead cost as subtotals.