Answer:
4300 units would cost $ 898461 or $ 208.9 ≅ $ 209 per unit
Explanation:
Production Volume 4,000 Units 5,000 Units
Direct Materials $85.80 per unit $85.80 per unit
Direct Labor $56.10 per unit $56.10 per unit
Manufacturing overhead $73.60 per unit $62.10 per unit
Total Manufacturing Costs $ 215.5 per unit $ 203.7 per unit
The best estimate of the total cost to manufacture 4,300
4000 units at $ 215.5 = $ 862,000
5000 units at $ 203.7= $1018500
9000 units would Cost = $ 862,000+$1018500= $ 1880500
We have taken the total of the two costs and then divided with the number of 9000 units to get an average price as the fixed costs are decreasing as the number of units increase from 4000 to 5000.
4300 units would cost = $ 1880500/ 9000 * 4300= $ 898461 or $ 208.9 ≅
$ 209 per unit
