Industries manufactures 3-D printers. For each unit, $3,400 of direct material is used and there is $2,600 of direct manufacturing labor at $16 per hour. Manufacturing overhead is applied at $20 per direct manufacturing labor hour. Calculate the profit earned on 46 units if each unit sells for $9,500.

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Business

Gretta

26 September, 16:39

Industries manufactures 3-D printers. For each unit, $3,400 of direct material is used and there is $2,600 of direct manufacturing labor at $16 per hour. Manufacturing overhead is applied at $20 per direct manufacturing labor hour. Calculate the profit earned on 46 units if each unit sells for $9,500.

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Finn Herring · Answer 1

The profit earned on 46 units is $11500

Explanation:

We first need to determine the cost per unit of 3-D printers. The cost per unit will contain the Direct material, Direct labor and Manufacturing Overheads cost per unit.

Manufacturing overheads per unit

As they are applied on direct manufacturing labor hours, we need to find out the labor hours consumed by each unit.

Manufacturing Labor hour per unit = 2600 / 16 = 162.5 hours

The manufacturing overheads per unit = 162.5 * 20 = $3250 per unit

The cost per unit of each printer is,

Direct Material 3400

Direct Labor 2600

Manufacturing OH 3250

Total cost per unit 9250

Profit per unit = 9500 - 9250 = $250

Profit on 46 units = 250 * 46 = $11500