The need for safety stock can be reduced by an operating strategy which: question 4 options: decreases ordering costs increases
1 answer:
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Answer:
Gross Profit = $5,172
Explanation:
For the information provided,
Manufacturing overhead at an activity level of 10,000 machine hours = $400,000
Thus, overhead per hour = $400,000/10,000 = $40 per hour
Direct material = $1,000
Direct labor cost = $1,500
Total manufacturing cost allotted = $40 23 = $920
Total direct cost = $1,000 + $1,500 + $920 = $3,420
Sales revenue = $716 12 = $8,592
Gross profit = Sales - Cost = $8,592 - $3,420 = $5,172