a. What is the current total product cost (for the 15 million units), including fixed and variable costs? b. What is the current average product cost per unit? c. What is the current fixed cost per unit? d. What is the forecasted total product cost next year (for the 20 million units)?
a. What is the current total product cost (for the 15 million units), including fixed and variable costs? b. What is the current average product cost per unit? c. What is the current fixed cost per unit? d. What is the forecasted total product cost next year (for the 20 million units)?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Transcribed Image Text:E
Perfect Pop spends $1.00 on direct materials, direct labour, and variable manufacturing overhead for every unt (12 pack of soda) it produces Fed manufacturing overhead costs $3 milion per yer The plant
which is currently operating at only 70% of capacity, produced 15 million units this year Management plans to operate closer to full capacity next year, producing 20 million units Management does not anticipate
any changes in the prices it pays for materials, labour, and manufacturing overhead
Requirements
Requirement a. What is the current total product cost for the 15 million units), including faed and varable costs?
Determine the formula, then calculate the current total product cost
milion
millon
GID
Total product costs
millon
Transcribed Image Text:a. What is the current total product cost (for the 15 million units), including fixed
and variable costs?
b. What is the current average product cost per unit?
c. What is the current fixed cost per unit?
d. What is the forecasted total product cost next year (for the 20 million units)?
e. What is the forecasted average product cost next year?
f. What is the forecasted fixed cost per unit?
g. Why does the average product cost decrease as production increases?
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