Xenbe manufactures plastic bottles . The have four operating machines in the factory that operate at 80% capacity. One machine can produce 10 000 plastic bottles per month at full capacity. There are four weeks in a month and all bottles are sold in the month of manufacture. Bottles are sold at R5 each.
The following costs are incurred on a monthly basis in the manufacturing of plastic bottles.
Plastic purchased per week. R8 000.
Wages of machine operators R2 000 per week. There are four operators on duty at any time.
Monthly salary of factory supervisor R20 000.
Depreciation of machines R6 000 per machine per annum.
Water and electricity of R12 000 per month. Must be apportioned according to floor space. (Factory takes up 80% of total floor space).
a) Calculate the variable cost per unit manufactured and the fixed cost per month.
