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Cushion materials
Padding $2.40
Vinyl 4.00
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Total cushion materials $6.40
Cost increase 10% (given) x1.10
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Cost of cushioned seat $ 7.04
Cushion fabrication labor ($7.50/DLH x .5 DLH) 3.75
Variable overhead ($5.00/DLH x .5 DLH) 2.50
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Total variable cost per cushioned seat $13.29
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Total variable cost per 100-unit lot $1,329
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Supervision $ 250,000
Heat and light 140,000
Property taxes and insurance 200,000
Depreciation 1,700,000
Benefits (20% of supervision) 50,000
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$2,340,000
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Deluxe Economy
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Selling price $58.50 $41.60
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Costs
Materials $14.55 $15.76
Labor ($7.50 x 1.5) 11.25 ($7.50 x .8) 6.00
Variable O/H ($5 x 1.5) 7.50 ($5 x .8) 4.00
Fixed O/H -- --
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Total costs $33.30 $25.76
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Unit CM $25.20 $15.84
Units produced x 100 x 125
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Total CM $2,520 $1,980
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