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Question - Screen Industries manufactures two products: Alpha and Beta. Both products are produced on the same assembly lines and packaged with 10 units of product per package. The predicted sales are 420,000 packs of Alpha and 520,000 packs of Beta. The budgeted costs for the coming year are as follows.
Variable cost
Fixed cost
Materials
$416,000
$832,000
Other
$624,000
$1,664,000
Each product uses 50 per cent of the variable material costs. The other costs are allocated as follows: variable costs based on machine time (Alpha 208,000 hours and Beta 104,000 hours) and fixed costs allocated evenly to both products. The management of Screen Industries desires an annual profit of $208,000 per product.
Required - Calculate the total cost for each product.
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