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    Computation of Unit Costs

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    Carola Industries, Inc., manufactures discs for several of the leading recording studios in the United States and Europe. Department 60 is responsible for the electronic circuitry within each disc. Department 61 applies the plastic-like surface to the discs and packages them for shipment. Carola recently produced 4,000 discs for the Milo Company. In fulfilling this order, the departments incurred the following costs:
    60 61
    Direct Materials Used $29,440 $3920
    Direct Labor 6,800 2,560
    Overhead 7,360 4,800

    1. Compute the unit cost for each department.
    2. Compute the total unit cost for the Milo Company order.
    3. The selling price for this order was $14 per unit. Was the selling price adequate?
    4. Compute the prime costs and conversion costs per unit for each department. If an amount box does not require an entry, leave it blank.

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    Solution Preview

    See attached Excel file for solution.

    answer department
    60 61
    direct material 29440 3920
    direct ...

    Solution Summary

    Computations of unit costs are determined.