Reference no: EM132665905

Problem 1: For producing 200 units of product, a company uses $60,000 of direct materials, pays $470,000 of direct labor and incurs $20,000 and $60,000 variable overhead and fixed overhead, respectively. Compute the product unit cost assuming that 450 units are produced.

Problem 2: Loose Company is to submit a bid on the production of 22,500 ceramic plates. It is estimated that the cost of materials will be $26,000 and the cost of direct labor will be $30,000. Factory overhead is applied at $2.70 per direct labor hour in the Molding Department and at 35% of the direct labor cost in the Decorating Department. It is estimated that 2,000 direct labor hours, at a cost of $18,000 will be required in the Molding Department. The company wants a markup of 45% of its total production cost. How much will the company bid for the ceramic plates?