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10 February, 06:17

A company would like to produce 5000 products per week for 30 weeks. The Direct Material Cost for the raw materials used in the product is $1.50 per product. After producing 500 products, the company must stop production to replace a filter on the machine (the filter is replaced after producing every 500 products). The filter costs $50.00. What is the Total Cost Per Product

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  1. 10 February, 09:11
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    Total Cost Per Product is $1.60

    Explanation:

    From the question the following information are derived:

    Direct raw material cost per product = $1.50

    The cost of the filter for producing 500 products = $50

    Hence, the cost of the filter per product = $ (50 / 500) = $0.10

    In this question, No cost of labor is given, we can now decide the following

    Total Cost per product = $ (1.50 + 0.10)

    = $1.60

    Total Cost Per Product in this account is $1.60
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