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Homework answers / question archive / The Janesky Company has collected data on the manufacture of 4,644 robot grippers last month

The Janesky Company has collected data on the manufacture of 4,644 robot grippers last month

Finance

The Janesky Company has collected data on the manufacture of 4,644 robot grippers last month. The breakdown of total costs is shown below. They now need to plan for future months.

Units sold last month4,644

Direct materials$413,409

Direct labor$296,661

Manufacturing variable overhead$155,063

Selling and administrative costs$428,474

What would be the break even price to produce and sell 6,642 units in the coming month?

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Computation of Break even price to produce and sell 6,642 units in the coming month:

Computation of Variable Cost:      
Particulars Total Cost Per Unit Cost  
Direct Materials  $413,409  89.02  =413409/4644
Direct Labor  $296,661  63.88  =296661/4644
Manufacturing Variable Overheads $155,063  33.39  =155063/4644
Total Variable Cost  $865,133  186.29  

 

Required Contribution = Fixed Cost/Units to be Sold = $428,474/6,642 = $64.51

 

Breakeven Price = $186.29+$64.51 = $250.80

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