The plant has capacity for 3,000 bicycles and is considering expanding production to 2,000 bicycles. What is the per unit cost of producing 2,000 bicycles?
Ridez Manufacturing currently produces 1,000 bicycles per month. The following per unit data apply for sales to regular customers:
Direct materials $50
Direct manufacturing labor 8
Variable manufacturing overhead 12
Fixed manufacturing overhead 15
Total manufacturing costs $85
A) $78.50 per unit
B) $170 per unit
C) $72.50 per unit
D) $77.50 per unit
Answer: D
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