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cost behavior and forecasting ramirez company manufactured 60 000 units of product l 690869

Cost Behavior and Forecasting

Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the manufacturing activity:

Variable costs:

 

Direct materials used

$ 1,020,000

Direct labor

2,240,000

Indirect materials and supplies

240,000

Power to run plant equipment.

280,000

Fixed costs:

 

Supervisory salaries

930,000

Plant utilities (other than power to run plant equipment)

220,000

Depreciation on plant and equipment (straight line, time basis)

135,000

Property taxes on building

195,000

Required

Unit variable costs and total fixed costs are expected to remain unchanged next year. Calculate the unit cost and the total cost of 51,000 units are produced next year.

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