The East Company manufactures several different products. Unit costs associated with Product ORD105 are as follows: Direct materials $ 86 Direct manufacturing labor 30 Variable manufacturing overhead 26 Fixed manufacturing overhead 12 Sales commissions (2% of sales) 22 Administrative salaries 24 Total $ 200 What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost?

Question

Milo Harding

Mathematics

10 April, 16:48

The East Company manufactures several different products. Unit costs associated with Product ORD105 are as follows: Direct materials $ 86 Direct manufacturing labor 30 Variable manufacturing overhead 26 Fixed manufacturing overhead 12 Sales commissions (2% of sales) 22 Administrative salaries 24 Total $ 200 What is the percentage of the total fixed costs per unit associated with Product ORD105 with respect to total cost?

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Evelin Miles · Answer 1

18%

Step-by-step explanation:

The computation of the percentage of the total fixed costs per unit is shown below:

= Total fixed cost : Total cost

where,

Total fixed cost = Fixed manufacturing overhead + administrative salaries

= $12 + $24

= $36

And, the total cost is $200

So, the percentage of the total fixed costs per unit is

= $36 : 200

= 0.18 or 18%