Business, 15.10.2020 07:01 KayPink5723

Office Productsâ (MOP) produces three different paper products at its Vaasa lumberâ plant: Supreme,â Deluxe, and Regular. Each product has its own dedicated production line at the plant. It currently uses the followingâ three-part classification for its manufacturingâ costs: directâ materials, direct manufacturingâ labor, and manufacturing overhead costs. Total manufacturing overhead costs of the plant in July are million â( million of which areâ fixed). This total amount is allocated to each product line on the basis of the direct manufacturing labor costs of each line. Summary dataâ (in millions) for July are asâ follows: Supreme Deluxe Regular
Direct material costs $89 $57 $60
Direct manufacturing labor costs $16 $26 $8
Manufacturing overhead costs $48 $78 $24
Units produced â 125 â 150 â 140

Required:
a. Compute the manufacturing cost per unit for each product produced in July 2017.
b. Suppose that, in August 2017, production was 150 million units of Supreme, 190 million units of Deluxe, and 220 million units of Regular. Why might the July 2017 information on manufacturing cost per unit bemisleading when predicting total manufacturing costs in August 2017?

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Office Productsâ (MOP) produces three different paper products at its Vaasa lumberâ plant: Supreme,â...

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