Solution-Costs of production during a trading period

Costs of production during a trading period

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Reference no: EM131067884

Beer has variable costs of £160 per unit of product and fixed costs of £2,100,000 per period. Unit costs of production during a trading period are as follows:

Components 85

Labour 60

Production overheads 105

Distribution expenses 50

The cost of components varies directly with the number of units produced. 80% of the labour costs vary directly with the number of units produced.

The production overheads do not vary irrespective of how many units are produced.

(a) Calculate the percentage of distribution expenses that vary directly with the number of units produced.

(b) Calculate the fixed costs per unit.

Reference no: EM131067884

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Costs of production during a trading period : Beer has variable costs of £160 per unit of product and fixed costs of £2,100,000 per period. Unit costs of production during a trading period are as follows:

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Costs of production during a trading period

Reference no: EM131067884

Reference no: EM131067884

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