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Dilithium Batteries is a division of Enterprise Corporation. The division manufactures and sells a long-life battery used in a wide variety of applications. During the coming year, it expects to sell 55,000 units for $34 per unit. Nyota Uthura is the division manager. She is considering producing either 55,000 or 88,000 units during the period.
Division Information for 2014
Beginning inventory
0
Expected sales in units
55,000
Selling price per unit
$34
Variable manufacturing costs per unit
$14
Fixed manufacturing overhead costs (total)
$440,000
Fixed manufacturing overhead costs per unit:
Based on 55,000 units
$8 per unit ($440,000/55,000)
Based on 88,000 units
$5 per unit ($440,000/88,000)
Manufacturing cost per unit:
$22 per unit ($14 variable + $8 fixed)
$19 per unit ($14 variable + $5 fixed)
Variable and administrative expenses
$2
Fixed selling and administrative expenses (total)
$42,900
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