The profit for each product of Basco Board and Shimano Board are $6.65 and $3.36.
Given,
There are two products: Basco Boards and Shimano Boards
Production cost for Basco Boards.
Direct material = $24.10
Direct labor = $30.10
Allocated overhead = $15.05
Production cost for Shimano Boards.
Direct material = $36.20
Direct labor = $51.20
Allocated overhead = $18.20
<h3>What is
profit?</h3>
Profit is the amount that we gain when a product is sold at a price that is more than the cost it used to make the product.
Selling price - Cost price = profit.
Profit for Basco Boards:
The cost to make one product of Basco Boards = Direct material + Direct labor + Allocated overhead
= $24.10 + $30.10 + $15.05
= $69.25
Cost per unit = Selling price = $75.90
Profit = $75.90 - $69.25
Profit = $6.65
Profit for Shimano Boards:
The cost to make one product of Shimano Boards = Direct material + Direct labor + Allocated overhead
= $36.20 + $51.20 + $18.20
= $105.6
Cost per unit = Selling price = $108.96
Profit = $108.96 - $105.6
Profit = $3.36
The profit for each product of Basco Board and Shimano Board are $6.65 and $3.36.
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