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stion 5(6.5 Points): ompany produces 10,000 units per month from Product A. The...

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Accounting

stion 5(6.5 Points):
ompany produces 10,000 units per month from Product A. The detrils of cost elements for product are as follows:
Labor: 0.30 hours are needed to produce one unit with a cost of $30 per labor hour.
Material: 0.50kg is needed to produce one unit with a cost of $2 per kg.
Factory overheads: 85% of the total direct cost.
Other indirect costs: 15% of the total direct cost.
Packaging cost and other charges: 15% of the total cos(direct + indirect).
a. Assuming that the company desired profit is 25% of the total manufacturing cost (direct costs, indirect costs, packaging costs, and other costs), use the "bottom-up" estimating approach to estimate the total manufacturing cost per unit and the selling price per unit for Product A.
b. The company has performed a market survey and found that the best compecitor's selling on this product and found that the material cost $2 per kg) is exagerated and should be coulate what should the material cost per kg be in order 10 achieve the argel price of 528 unit. (3 Points)
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