Calculation of ending cost of inventory

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Calculation of ending cost of inventory.

The company has an offer from a wholesaler to purchase the part for $31 per unit.  If the company decides to accept the offer the cost for this part will increase or decrease by__ per unit?

Hint:  Cost of ending inventory $172,286

Calculation of cost per unit

The Walter Jewelry Company produces a bracelet which normally sells for $79.95.  The company produces 1,500 units annually but has the capacity to produce 2,000 units.  A special order for manufacturing and selling 200 bracelets at $49.95 has been received which would not disrupt current operations.  Current costs for the bracelet are as follows:

Direct materials

$17.00

Direct labor

14.50

Variable overhead

4.00

Fixed overhead

    5.00

Total

$40.50

 

Reference no: EM1311982

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