Sander Company produces mathematical and financial calculators and op- erates at capacity. Data related to the two products are presented here: Mathematical Financial 45,000 Annual production in units 90,000 $360,000 $180,000 9,000 60,000 $180,000 $ 90,000 4,500 30,000 Direct material costs Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Number of production runs Inspection hours 45 45 1,200 600 Total manufacturing overhead costs are as follows: Total $360,000 108,000 117,000 Machining costs Setup costs Inspection costs

Sander Company produces mathematical and financial calculators and op- erates at capacity. Data related to the two products are presented here: Mathematical Financial 45,000 Annual production in units 90,000 $360,000 $180,000 9,000 60,000 $180,000 $ 90,000 4,500 30,000 Direct material costs Direct manufacturing labor costs Direct manufacturing labor-hours Machine-hours Number of production runs Inspection hours 45 45 1,200 600 Total manufacturing overhead costs are as follows: Total $360,000 108,000 117,000 Machining costs Setup costs Inspection costs

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

Compute the manufacturing cost per unit for each product.

Sander Company produces mathematical and financial calculators and op-
erates at capacity. Data related to the two products are presented here:
Mathematical
Financial
45,000
Annual production in units
90,000
$360,000
$180,000
9,000
60,000
$180,000
$ 90,000
4,500
30,000
Direct material costs
Direct manufacturing labor costs
Direct manufacturing labor-hours
Machine-hours
Number of production runs
Inspection hours
45
45
1,200
600
Total manufacturing overhead costs are as follows:
Total
$360,000
108,000
117,000
Machining costs
Setup costs
Inspection costs

Definition Definition Total cost of procuring or producing a product or the cost that an individual or business owner undertakes for the manufacturing of goods.

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