Question

9) Given the following information, compute the total number of units for the period: Direct labor hours 12,000 Direct labor cost $ 2.70 per hour Direct materials cost $ 75 per unit Total manufacturing cost $ 132,600 Fixed overhead cost $ 36,000 Variable overhead cost 50 % of total labor cost 9) A) 360. B) 840. C) 640. D) 432

Answer 1

Answer:

C) 640 units

Explanation:

Given that

Total manufacturing cost = $132,600

Per unit material cost = $75

Fixed overhead cost = $36,000

Variable overhead cost = 50% of total labor cost

The computation of total number of units is given below:-

Variable overhead cost

= 12,000 × $2.70 × 50%

= $16,200

Direct labor cost

= 12,000 × $2.70

= $32,400

Total Direct material cost = Total manufacturing cost - Variable overhead cost - Fixed overhead cost - Direct labor cost

= $132,600 - $16,200 - $36,000 - $32,400

= $48,000

Total number of units = Total Direct material cost ÷ Direct materials cost

= $48,000 ÷ $75

= 640 units