Butbly Soda spends 2 on direct materials direct labot and am

Butbly Soda spends $2 on direct materials, direct labot, and amerny operating at only 75% ofcapecity, prod od 25 millon urits hs yow Management he prioes it pays for materials, labor, and manufacturing overhead Read he variable manufacturing overhead for every unit (12-pack of soda)ia produces Fored manufacturing overhead costs $7 miltion per year. The plant, which is units this year. Management plans to operate closer to full capecity next year, producing 36 milion units. Management doesn\'t antioipate any changes in Requirement 3 What is the cument fxed cost per uni? Determine the formuia, hen caloulate the oument fxed oost per unit (Enter your arewer to the nearest cent) Curment fixed cost per unit milion f milon per unit

Solution

Fixed manufacturing overhead/ No. of units produced in current year = Current fixed cost per unit

7 million / 25 million = .28 cent per unit

Figures are not very clearly visible in the question I can see the units produced in current year as 25 million please reconfirm in case of any confusion.