Vision Enterprises manufactures digital video equipment.For each unit,$3,000 of direct material is used and there is $2,000 of direct manufacturing labor at $20 per hour.Manufacturing overhead is applied at $25 per direct manufacturing labor hour.Calculate the profit earned on 50 units if each unit sells for $9,000.

Question

Quizplus · Accepted Answer

Calculation of total cost per unit:
Direct materials: $3,000
Direct labor: $2,000 ($20 per hour * 100 hours)
Manufacturing overhead: $2,500 ($25 per direct manufacturing labor hour * 100 hours)

Total cost per unit: $7,500

Profit per unit: $9,000 - $7,500 = $1,500

Total profit for 50 units: $1,500/ unit * 50 units = $75,000

Therefore, the best choice is C.

Vision Enterprises Manufactures Digital Video Equipment