PRODUCT PRICING

Total Production Cost

The total production cost for the operation is P 1 942 091. Computed as follows;

Total Production Cost

Raw Materials 1 303 271

Direct Labor 312 000

Variable Manufacturing Overhead 326 820

Total Production Cost 1 942 091

Raw Materials = Raw Materials per day x 312 days

= P4,177.15 x 312

= 1, 303, 271

Direct Labor = Direct labor per day x 312 Days

= 1 000 x 312

= 312 000

Variable Manufacturing Overhead = Indirect labor cost + Indirect Materials

= (950 x 312) + (97.50 x 312)

= 326 820
Sizes Packs per Year Total Production Cost Product Price

A B C (C/B)

150g 27,456 (88*312) 1 942 091 P 71

300g 33,072 (106*312) 1 942 091 P 59

500g 49,608 (159*312) 1 942 091 P 39