Why do I have to pay
2 answers:
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Answer:
predetermined overhead per direct labor hour: $11.02
Explanation:
To solve for overhead rate we determinate the expected cost and distribute them over a cost driver which is, in this case; direct labor hours
<u>Expected overhead cost:</u>
Machinery maintenance $ 181,350
Utilities $ 226,380
Supervision $ 191,000
Materials handling cost $ 67,000
Building occupancy costs $ 98,270
Indirect materials $<u> 31,650 </u>
Total overhead: $ 795,650
Total direct labor: 72,000
Overhead rate: 795,650 / 72,000 = 11.0206944= $11.02
Answer: $320
Explanation:
The Profit as the question shows is the Total Revenue less the total cost.
Total Revenue.
This will be the amount of goods sold multiplied by the price they are sold at.
The monopolist maximises output where Marginal Revenue equals Marginal Cost which from the graph is 4 units.
The price they sell at is the intersection of this quantity with the demand curve which is at $120.
Total Revenue = Units Sold * Price
= 4 * 120
= $480
Total Cost
The total cost will be the average cost per unit multiplied by the number of units sold. The relevant average cost is the cost associated with the maximised out of 4 units which according to the graph is $40.
= Average cost * number of units
= 40 * 4
= $160
Profit = 480 - 160
= $320
