What is the cost of producing the purse

Reference no: EM132220978

Question - The Fashionz Company makes stylish purses for young professional women. A new purse is being introduced and Fashionz needs to know its cost. They estimate that the purse will take a total of 2.6 labor hours to make at a cost of $13.60 per hour with 21% benefits. The materials going into the purse are estimated to be 2.1 square feet. Seventy percent of the material ends up in the purse. Approximately 5% of the purses are rejected. The material costs $20/square feet and has a salvage value of $2.60 per square feet. The purse is estimated to take up 11% of the plant's capacity. Forty-two employees will be assigned to the purse (40 hours/week). The weekly overhead costs are $12.260.

Required - What is the cost of producing the purse?

Reference no: EM132220978

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