During its first year of operations, Connor Company paid $31,750 for direct materials and $18,500 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,500. General, selling, and administrative expenses were $8,500. The company produced 5,500 units and sold 4,500 units for $15.50 a unit. The average cost to produce one unit is which of the following amounts?

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Business

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21 June, 21:21

During its first year of operations, Connor Company paid $31,750 for direct materials and $18,500 in wages for production workers. Lease payments and utilities on the production facilities amounted to $7,500. General, selling, and administrative expenses were $8,500. The company produced 5,500 units and sold 4,500 units for $15.50 a unit. The average cost to produce one unit is which of the following amounts?

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Jocelyn Gibson · Answer 1

average production cost = $10.5

Explanation:

DM 31,750

DL 18,500

MO 7,500

Total production cost: 57,750

S&A 8,500

produced unts 5,500

average production cost 57,750 / 5,500 = 10.5 per unit