Topics: Costs, Average cost, Cost accounting Pages: 2 (256 words) Published: October 19, 2014
A.1.a. Average materials cost per unit

Probability distribution of material cost per unit Material CostProbabilityCumulative
ProbabilityMaterial cost per probability
330.040.00-0.041.32
350.050.04-0.091.75
380.120.09-0.214.56
390.790.21-1.0030.81
Total1.0038.44
Average material cost per unit = (33*0.04) + (35*0.05) + (38*0.12) + (39*0.79) = \$38.44

Simulation results

A.1.b. Average labor cost per unit

Probability distribution of labor cost per unit Labor cost
ProbabilityCumulative
ProbabilityLabor cost per Probability
220.020.00-0.020.44
230.340.02-0.367.82
240.050.36-0.411.20
250.390.41-0.809.75
280.200.80-1.005.60
Total124.81
Average labor cost per unit = (22*.02) + (23*.34) + (24*.05) + (25*.39) + (28*.20) = \$24.81 Simulation results

A.1.c Average utilities cost per unit
Probability distribution of utilities cost per unit UtilitiesProbabilityCumulative
ProbabilityUtilities cost per unit
3.430.00-0.431.29
4.480.43-0.911.92
6.090.91-1.00.54
Total13.75
Average utilities cost per unit = (3*.43) + (4*.48) + (6*.09) = \$3.75

Simulation results

A.1.d. Average total cost per unit
Average cost per unit = Average material cost + average labor cost + average utilities cost 38.44 + 24.81 + 3.75 = \$67.00

A.2. Show tables you used to correctly determine the costs in part A1a-A1d. ***Given in corresponding part.
B.1. Average cost per unit + markup = selling price per unit Using the probability distribution the selling price per unit is \$87.42 (67.42 + 20.00)