Product Costs

Bobs Bistro produces party-sized hoagie sandwiches. For next year, Bobs Bistro predicts that 50,000 units will be produced with the following total costs:

Direct materials	$100,000
Direct labor	80,000
Variable overhead	20,000
Fixed overhead	260,000

Required:

If required, round your answers to the nearest cent.

1. Calculate the prime cost per unit. $fill in the blank 1 per unit

2. Calculate the conversion cost per unit. $fill in the blank 2 per unit

3. Calculate the total variable cost per unit. $fill in the blank 3 per unit

4. Calculate the total product (manufacturing) cost per unit. $fill in the blank 4 per unit

5. What if the number of units decreased to 40,000 and all unit variable costs stayed the same? indicate the impact on the following costs.

a. Total direct materials

decreases bydoes not changeincreases bydecreases by

less than 20%20%more than 20%no change20%

b. Total direct labor

does not changedecreases byincreases bydecreases by

less than 20%20%more than 20%no change20%

c. Total variable overhead

does not changedecreases byincreases bydecreases by

less than 20%20%more than 20%no change20%

d. Total fixed overhead

does not changedecreases byincreases bydoes not change

less than 20%20%more than 20%no changeno change

e. Unit prime cost

does not changedecreases byincreases bydoes not change

less than 20%20%more than 20%no changeno change

f. Unit conversion cost

does not changedecreases byincreases byincreases by

less than 20%20%more than 20%no changeless than 20%

What would the product cost per unit be in this case? $fill in the blank 17 per unit