Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity.

 Dayton, Inc. manufactured 15,000 units of product last month and identified the following costs associated with the manufacturing activity.

 

Required:

Unit variable costs and total fixed costs are expected to remain unchanged next month. Calculate the unit cost and the total cost if 21,000 units are produced next month.

 

Explanation

The variable costs will be 40% higher because there will be an increase of 21,000 − 15,000 = 6,000 units (40% = 6,000 ÷ 15,000).

 

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