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Cost Behavior and Forecasting
Ramirez Company manufactured 60,000 units of product last year and identified the following costs associated with the manufacturing activity:
Variable costs:
Direct materials used
$ 1,020,000
Direct labor
2,240,000
Indirect materials and supplies
240,000
Power to run plant equipment.
280,000
Fixed costs:
Supervisory salaries
930,000
Plant utilities (other than power to run plant equipment)
220,000
Depreciation on plant and equipment (straight-line, time basis)
135,000
Property taxes on building
195,000
Required
Unit variable costs and total fixed costs are expected to remain unchanged next year. Calculate the unit cost and the total cost of 51,000 units are produced next year.
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