The bottle manufacturer Ivrelle worked overtime all year to meet exceptional demand. It produced 240,000 units cases, whereas its normal capacity is 200,000 units cases, a level management considers abnormally high. Per case, materials cost 14, direct labour 6 and variable overheads, allocated on the actual use of the facilities, 3. Fixed production overheads for the year amount to 1,200,000. Compute the fixed overhead per case and the unit production cost.
- Materials per case
- 14
- Direct labour per case
- 6
- Variable overheads per case
- 3
- Fixed production overheads
- 1,200,000
- Normal capacity (cases)
- 200,000
- Actual production (cases)
- 240,000