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swansea manufacturing currently produces​ 3,000 tires per month. the following per unit data for​ 3,000 tires apply for sales to regular​ customers: direct materials ​$38 direct manufacturing labor 14 variable manufacturing overhead 19 fixed manufacturing overhead 20 total manufacturing costs ​$91 the plant has capacity for​ 5,000 tires and is considering expanding production to​ 4,000 tires. what is the total cost of producing​ 4,000 tires?

Sagot :

The total cost of producing​ 4,000 tires is $344,000

Given,

Swansea manufacturing produces = $3,000 tires per month.

Per unit data = $3,000

Direct materials = $38

Direct manufacturing labor = 14 variable

Variable manufacturing overhead = 19 fixed

Fixed manufacturing overhead = 20 total

Total manufacturing costs = $91

Expanding production = $4,000 tires.

Total cost = ?

The total cost is calculated below,

[(Direct materials + Direct manufacturing + Total manufacturing costs) × units] + (Fixed manufacturing overhead × Per unit data)

= [($38+ $14 + $19) × $4,000 units] + ($20 × $3,000 units)

= ($71 × $4,000 units) + $60,000 units

= $344,000

Hence, the total cost of producing​ 4,000 tires is $344,000

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