Question

Major Industries manufactures covers for iPads. One of its most popular products, Hercules, has the following costs to produce 1,000 units: $24,000 direct materials, $4,800 advertising costs, $2,400 plant manager salary, and $1,600 salaries for factory maintenance. If the cost to produce one Hercules cover is $36.80, how much is Major’s direct labor for this product? A :

Answer 1

$8,800

Step-by-step explanation:

Direct labor costs are costs that can be traced to converting raw materials into finished goods.

Direct labor can be calculated as: (direct materials + manager's salary + salaries for factory maintenace + X) divided by the number of units equals price per unit or

($24,000 + X + $2,400 + $1,600)/1,000 units = $36.80; X = $8,800.

Answer 2

Direct labor is $4,000

Step-by-step explanation:

The direct labor will be computed as follows:

Direct materials : $24,000

Advertising costs : $4,800

Plant manager salary : $2,400

Salaries for factory maintenance : $1,600

$32,800

Overall cost for producing 1000 units

= $36.80 X 1000 = $36,800

Direct labor for the product

$36,800 - $32,800 = $4,000