Sandford Company manufactures one product. Its variable manufacturing cost is $16 per unit and the total fixed manufacturing cost is $600,000. Calculate Sandford's total manufacturing costs if it produces 10,000 units.
Costs of a Firm:
The total costs of a firm can be bifurcated into manufacturing costs and operating costs. Furthermore, these costs can be categorized into fixed costs and variable costs on the basis of their variability with the production or sales volume.
Answer and Explanation: 1
The calculated value of the total manufacturing cost is $760,000.
The total variable manufacturing cost is computed as:
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fromChapter 5 / Lesson 2
Job order costing systems organize costs according to units or products, common in service and production companies. Learn the importance of journals in recording manufacturing costs and how period costs are included as well.