![]() ![]() So, the management decided to determine the per-unit production cost incurred during last year. The company is planning to bid for a large volume (1,000,000) 6-monthly contract at the rate of $4.00 per piece. Let us take the example of a company that is associated with the manufacturing of mobile phone covers. Therefore, the production cost of the company add up to $1.39 million for the period. Product Cost = Direct Material Cost + Direct Labor Cost + Manufacturing Overhead Cost Product Cost is calculated using the formula given below Manufacturing Overhead Cost = Indirect Material Cost + Indirect Labor Cost + Other Overhead Cost Manufacturing Overhead Cost is calculated using the formula given below $7,700 incurred as factory rent and utilitiesĬalculate the product cost of the company based on the given information.$10,300 worth of greasing oils used for machine maintenance.$350,000 paid for cobbler’s wage and $20,000 for security’s salary.$1,000,000 expensed on leather and stitching thread.The following information has been confirmed by the company’s accounts department: Recently the company collected information pertaining to production cost. Let us take the example of a company that is engaged in manufacturing shoes in the Canadian province of Alberta. You can download this Product Cost Formula Excel Template here – Product Cost Formula Excel Template Product Cost Formula – Example #1 ![]()
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