Question

Zoro Manufacturing Company manufacturers wooden picture frames. Each piece of wood yields 15 frames. Each piece of wood costs $18.75. The direct labor charge is $13.50 per hour. Each hour, 65 frames can be produced. To the nearest cent, what is the prime cost of manufacturing one picture frame?

Answer 1

To determine the cost of manufacturing one picture frame, add all the known cost by the number of frames produced. With the basis of one hour of operation,

                                  Cost of wood per frame = $18.75 / 15 = $1.25

                           Cost of direct labor per frame = $ 13.50 / 65 = $ 0.21

Adding all up the costs, 

                                     total cost = $1.25 + $0.21 = $1.46

Therefore, manufacturing one picture frame costs approximately $1.46.