Question

Total direct materials costs are $127,500, fixed costs are $75,000, and units produced are 15,000. What is the direct materials cost per unit?

Answer 1

$8.5 cost per unit

Step-by-step explanation:

Given that

Total direct materials costs = $127,500

Fixed cost = $75,000

Number of units produced = 15,000 units

So, the direct materials cost per unit would be

= Total direct materials costs ÷ Number of units produced

= $127,500 ÷ 15,000 units

= $8.5 cost per unit

By dividing the total direct material cost by the number of units produced we could find out the direct materials cost per unit