Answer: 678 units
Explanation:
To answer this we shall subtract the various cost components from the main figure.
The total cost is $181,145.
The total labor cost would be,
= Labor hours x rate
= 13,900 x 2.70 per hour
= $37,530
The variable cost is 50% of total labor so that would be,
= $37,350 x 0.5
= $18,765
The fixed overhead cost is given at $74,000
Subtracting these would be
= 181,145 - 37,530 - 18,765 - 74,000
= $50,850
This figure is the Direct materials cost. The last cost.
Now it says that Direct materials cost $75 per unit so we can get the no. of units by division.
= 50850/ 75
= 678 units.
The total number of units was 678.
If you need any clarification or have any questions please feel free to comment or react. Thank you.
