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I do understand how the estimated costs came to 31.30.
The production costs came to £15.30 which made sense but I don’t understand where the £16 comes from.
Can you explain as the non-production costs come to £5600 per unit / 350,000 = 0.016.
Kind Regards
RobertIn future, if you want me to answer then you must ask in the Ask the Tutor Forum – this forum is for students to help each other 🙂
The non-prodution costs in the question have ‘$’000’ at the top of the column and are therefore given in thousands.
Therefore the total is $5,600,000 (not $5,600) and so the unit cost is 5,600,000 / 350,000 = $16.
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