Calculate the full production cost per unit

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Reference no: EM132115323

Saturn, a chocolate manufacturer, produces three products: ? The Sky Bar, a bar of solid milk chocolate. ? The Moon Egg, a fondant filled milk chocolate egg. ? The Sun Bar, a biscuit and nougat based chocolate bar.

Information relating to each of the products is as follows: Sky Bar Moon Egg Sun Bar Direct labour cost per unit ($) 0.07 0.14 0.12

Direct material cost per unit ($) 0.17 0.19 0.16

Actual production/ sales (units) 500,000 150,000 250,000

Direct labour hours per unit 0.001 0.01 0.005

Direct machine hours per unit 0.01 0.04 0.02

Selling price per unit ($) 0.50 0.45 0.43

Annual production overhead = $80,000

Required:

Using traditional absorption costing, calculate the full production cost per unit and the profit per unit for each product. Explain the implications of the figures calculated.

Reference no: EM132115323

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