Given the data below, use the segmenting model to estimate a manufacturer's total annual cost. Estimated annual production volume = 400,000 units Estimated direct labor cost per unit = $3.75Estimated indirect labor cost per unit = $0.92Estimated raw material and purchased part cost per unit = $32.50All other costs are independent of production volume and are estimated at $800,000 per year

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Cost of Production

In economic theory, production costs are the costs incurred by an industrial organization when it engineers a project or provides a service that generates revenue and benefits. Labor costs, raw materials, consumable manufacturing costs, and general overhead sum up, accounting for production costs. Total cost data is calculated by combining total direct costs of materials, labor costs, and total production costs.