Solution-What is the variable manufacturing cost per vehicle

What is the variable manufacturing cost per vehicle

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Reference no: EM132853552

Question - JFK Bay Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. JFK Bay has the following manufacturing costs for 2021:

Plant management costs, $1,200,000 per year.

Cost of leasing equipment, $1,800,000 per year.

Workers' wages, $500 per Surfer vehicle produced.

Direct materials costs: Steel, $1,000 per Surfer; Tires, $200 per tire, each Surfer takes 5 tires (one spare).

Boston City license, which is charged monthly based on the number of tires used in production:

0-500 tires $50,000

501-1,000 tires $70,000

more than 1,000 tires $200,000

JFK Bay currently produces 150 vehicles per month.

Required -

a. What is the variable manufacturing cost per vehicle?

b. What is the fixed manufacturing cost per month?

c. What is the total manufacturing cost of each vehicle if 100 vehicles are produced each month? 500 vehicles? How do you explain the difference in the manufacturing cost per unit (briefly)?

Reference no: EM132853552

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What is the variable manufacturing cost per vehicle

Reference no: EM132853552

Reference no: EM132853552

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