John contracts with Kelly to buy a certain number of cattle for Kelly’s Circle K ranch. John makes a deal with Lawson, the owner
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Answer: Total product cost per unit if 12,500 units = $13.
Explanation:
Given that,
Direct labor = $2
Direct material = $3
Variable overhead = $4
Total variable cost = $9
Fixed overhead ($50,000/10,000 units) = $5
Total product cost per unit = $14
Fixed Overhead at 12500 units = = $4
∴ Total product cost per unit if 12,500 units = Total variable cost per unit + Fixed Overhead at 12500 units
= 9 + 4
= $13