Saturn, a chocolate manufacturer, produces three products:Information relating to each of the products is as follows:The Sky Bar, a bar of solid milk chocolate.
- The Moon Egg, a fondant filled milk chocolate egg.
- The Sun Bar, a biscuit and nougat based chocolate bar.
Information relating to each products is a s follows:
- Direct labour cost/unit ($): SkyBar(0.07); MoonEgg (0.14); SunBar(0.12)
- Direct material cost per unit($): Sky Bar(0.17); Moon Egg(0.19); Sun Bar(0.16)
- Actual production/ sales(units): Sky Bar(500,000); Moon Egg(150,000); Sun Bar(250,000)
- Direct labour hours per unit: Sky Bar(0.001); Moon Egg(0.01); Sun Bar(0.005)
- Direct machine hours per unit: Sky Bar(0.01); Moon Egg(0.04); Sun Bar(0.02)
- Selling price per unit($): Sky Bar(0.50); Moon Egg(0.45); Sun Bar(0.43)
- Annual production overhead = $80,000
Required:
Using traditional absorption costing, calculate the full production cost perunit and the profit per unit for each product. Comment on theimplications of the figures calculated.