9) Jim's Manufacturing currently produces 1,250 brakes per month. The following per unit data apply for sales to regular customers:
Direct materials$225
Direct manufacturing labor28
Variable manufacturing overhead50
Fixed manufacturing overhead35
Total manufacturing costs$338
The plant has capacity for 2,000 brakes.
Required:
a.What is the total cost of producing 1,000 brakes?
b.What is the total cost of producing 1,500 brakes?
c.What is the per-unit cost when producing 1,500 brakes?
10) During 2011, Maryland Corporation incurred manufacturing expenses of $15,000,000 to produce 300,000 finished units. At year-end, it was determined that 250,000 units were sold while 25,000 units remained in ending inventory.
Required:
a.Compute the cost to produce one unit.
b.Compute the amount that will be reported on the income statement for cost of goods sold.
c.Compute the amount that will be reported on the balance sheet for ending inventory.
11) Managers should think in terms of unit costs rather than terms of total costs for many decisions.
12) The unit cost, or average cost, is the ratio of total costs to the number of units produced.
13) Write a short essay and discuss how unit costs are calculated. Discuss how unit costs are related to the value chain.