St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst...
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Accounting
St. Kilda Enterprises produces parts for the electronics industry. The production manager and cost analyst reviewed the accounts for the previous month and have provided an estimated breakdown of the fixed and variable portions of manufacturing overhead.
Fixed Variable Total Indirect materials $ 3,000 $ 8,000 $ 11,000 Indirect labor 2,000 16,000 18,000 Supervision 9,000 3,000 12,000 Depreciation 36,000 4,000 40,000 Maintenance 16,000 21,000 37,000 Total $ 66,000 $ 52,000 $ 118,000
Direct materials for the month amounted to $97,500. Direct labor for the month was $192,500. During the month, 12,500 units were produced.
a. No changes are expected in these cost relations next month. The firm has budgeted production of 16,250 units. Provide an estimate for total production cost for next month.
b. Determine the cost per unit of production for the previous month and the next month.
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