Question

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

Answer 1

Answer:

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