Answer the Following Questions Using the Information Below:
Buildz Manufacturing

question 218

Multiple Choice

Answer the following questions using the information below:
Buildz Manufacturing currently produces 1,000 tables per month. The following per unit data for 1,000 tables apply for sales to regular customers:
$\begin{array}{lr}\text { Direct materials } & \$ 50 \\\text { Direct manufacturing labor } & 10 \\\text { Variable manufacturing overhead } & 15 \\\text { Fixed manufacturing overhead } & \underline{30} \\{\text { Total manufacturing costs }} & \$ 105\end{array}$
-What is the per unit cost when producing 3,000 tables?

• A) $58.33
• B) $175.00
• C) $85.00
• D) $125.45

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Definitions:

Excess Capacity

The situation where a firm or economy can produce more goods or services than currently demanded, often leading to underutilization of resources.

Average Total Cost

The total cost of production divided by the total output, representing the cost per unit of production.

Advertising Slogan

A short and striking or memorable phrase used in advertising campaigns.

Potential Buyers

Individuals or entities that have shown interest or are in a position to purchase goods or services.