The Outdoor Dining Company specializes in producing a set of wood patio furniture consisting of a table and four chairs

Accounting Oct 01, 2020

The Outdoor Dining Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 4,000se. per year. Annual cost data at full capacity follow:
95,000 8100,000 70,000 8 20,000 62,000 8 5,000 1,000 8 20,000 19,000 8101,000 3,000 8421,000 41,000
Compute the average product cost per patio set?

Expert Solution

Given,

Total cost of direct product cost= 526000

Total cost of indirect product cost= 276000

Capacity of per set= 4000

Average product cost= (526000+ 276000)/ 4000

= $200.50

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