Answer: 678 units
Explanation:
To answer this we shall subtract the various cost components from the main figure.
The total cost is $181,145.
The total labor cost would be,
= Labor hours x rate
= 13,900 x 2.70 per hour
= $37,530
The variable cost is 50% of total labor so that would be,
= $37,350 x 0.5
= $18,765
The fixed overhead cost is given at $74,000
Subtracting these would be
= 181,145 - 37,530 - 18,765 - 74,000
= $50,850
This figure is the Direct materials cost. The last cost.
Now it says that Direct materials cost $75 per unit so we can get the no. of units by division.
= 50850/ 75
= 678 units.
The total number of units was 678.
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Answer:
678 units
Explanation:
The total manufacturing cost is made of 2 categories of cost. These are the direct cost and the indirect/overhead costs. The direct cost includes direct material cost, direct labor etc. The overheads may be categorized into fixed and variable elements.
Given that Direct labor hours 13,900 Direct labor cost $ 2.70 per hour and Variable overhead cost 50 % of total labor cost
Variable over head = 50% × (13,900 × $2.70)
= $18,765
Let the number of units be y
(13,900 × $2.70) + 75y + $74,000 + $18,765 = $181,145
75y = $181,145 - $74,000 - $18,765 - $37,530
75y = $50,850
y = $50,850 /75
y = 678
