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31 May, 10:23

Given the following information, compute the total number of units for the period:

Direct labor hours 13,100

Direct labor cost $2.70per hour

Direct materials cost $75per unit

Total manufacturing cost $160,705

Fixed overhead cost $58,000

Variable overhead cost 50% of total labor cost

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  1. 31 May, 11:22
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    Total number of units produced for the period = 662 units

    Explanation:

    Total manufacturing cost = (Fixed overhead cost) + (Total direct labour cost) + (Total materials cost) + (Total Variable overhead cost)

    Let the number of units produced be Q

    Total manufacturing cost = $160705

    Fixed overhead cost = $58000

    Total direct labour cost = cost of direct labour per hour * number of direct labour hours = 2.7 * 13100 = $35370

    Total direct materials cost = Direct material cost per unit * number of units produced = 75 * Q

    Total variable overhead cost = 50% of total labour cost = 50% of 35370 = $17685

    160705 = 58000 + 35370 + 75Q + 17685

    75Q = 160705 - 58000 - 35370 - 17685

    75Q = 49650

    Q = 662 units
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