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The Knapp Company needs to predict the labor cost in producing small carrot patch dolls. The following production information is available:
Year
Dolls Produced
Labor Hours
Labor Dollars
2005
1,150
850
$17,000
2006
1,600
975
23,400
2007
1,100
800
25,600
2008
2,100
36,800
2009
1,500
950
34,200
2010
1,300
875
35,000
The technology has not changed since 2005. Wage rates have steadily increased since 2005; however, management expects no further wage increases in 2011.
Required:
based on your assumptions, calculate the cost per unit (total product cost on a per unit basis) under a traditional accounting system based on direct labor hours (table 1 prepared
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