Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
$\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 10 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & \underline{30} \
{\text { Total manufacturing costs }} & \$ 105
\end{array}$
-What is the per unit cost when producing 3,000 tables?
A) $58.33
B) $175.00
C) $85.00
D) $125.45

Question

Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
 $\begin{array}{lr}
\text { Direct materials } & \$ 50 \
\text { Direct manufacturing labor } & 10 \
\text { Variable manufacturing overhead } & 15 \
\text { Fixed manufacturing overhead } & \underline{30} \
{\text { Total manufacturing costs }} & \$ 105
\end{array}$
-What is the per unit cost when producing 3,000 tables?
A) $58.33
B) $175.00
C) $85.00
D) $125.45

Quizplus · Accepted Answer

When producing 3,000 tables, the fixed manufacturing overhead cost per unit decreases because it is spread over more units. The variable costs remain the same. Therefore, the per unit cost is calculated as: Direct materials ($50) + Direct manufacturing labor ($10) + Variable manufacturing overhead ($15) + (Fixed manufacturing overhead $30,000 / 3,000 units) = $85.00.

Answer the Following Questions Using the Information Below: Buildz Manufacturing

Answer the Following Questions Using the Information Below:
Buildz Manufacturing