During its first year of operations, Forrest Company paid $28,810 for direct materials and $49,900 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $13,900. General, selling, and administrative expenses were $19,900. The average cost to produce one unit was $4.90. How many units were produced during the period?

Question

Joe King

Business

4 March, 03:37

During its first year of operations, Forrest Company paid $28,810 for direct materials and $49,900 in wages for production workers. Lease payments, utility costs, and depreciation on factory equipment totaled $13,900. General, selling, and administrative expenses were $19,900. The average cost to produce one unit was $4.90. How many units were produced during the period?

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Answers (1)

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Melvin Townsend · Answer 1

18,900 units were produced during the period

Explanation:

General, selling, and administrative expenses does not make part of the Manufacturing Overhead Costs so the calculation of the units is as follow:

(Direct materials + Wages for production workers + Lease payments, utility costs, and depreciation on factory equipment) / the average cost to produce one unit

($28,810 + $49,900 + $13,900) / $4.90 = $92.610,00 / $4.90 = 18,900