Problem 4 – 20 Points

Problem 4 – 20 Points
The estimated unit costs for a company to produce and sell a product at a level of 12,000 units per month are as follows:

Cost Item Estimated
Unit Cost
Direct material $32
Direct labor 20
Variable manufacturing overhead 15
Fixed manufacturing overhead 6
Variable selling expenses 3
Fixed selling expenses 4

a. What are the estimated conversion costs per unit?
b. What are the estimated prime costs per unit?
c. What are the estimated variable costs per unit?