Reference no: EM133265590
Question: Big Thumbs Company manufactures portable flash drives for computers. Big Thumbs incurs monthly depreciation costs of $14,500 on its plant equipment and monthly advertising costs of $1,900 to place advertisements in magazines. Also, each drive requires materials and manufacturing overhead resources. On average, the company uses 10,200 grams of materials to manufacture 5,100 flash drives per month. Each gram of material costs $3.00. In addition, manufacturing overhead resources are driven by machine hours. On average, the company incurs $20,400 variable manufacturing overhead resources to produce 5,100 flash drives per month.
In your calculations, round per unit costs to the nearest cent. If required, round final answers (other than per unit costs) to the nearest dollar.
Required:
1. Create formula for the monthly cost of flash drives for Big Thumbs.
Total cost of flash drives =
Depreciation costFixed costVariable cost + (Manufacturing overheadMaterialsVariable rate x Number of flash drives)
Total cost of flash drives = $fill in the blank 3 + ($fill in the blank 4 x Number of flash drives)
2. If the department expects to manufacture 6,000 flash drives next month, what is the expected fixed cost (assume that 6,000 units is within the company's current relevant range)?
$fill in the blank 5
What is the total variable cost (assume that 6,000 units is within the company's current relevant range)?
$fill in the blank 6
What is the total manufacturing cost (i.e., both fixed and variable) (assume that 6,000 units is within the company's current relevant range)?
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