Question

Use information in the first two bullet points to calculate

a) direct manufacturing labor costs in and
b) cost of direct materials used in

Answer 1

To calculate direct manufacturing labor costs, multiply the number of workers by the labor cost. To calculate the cost of direct materials used, multiply the number of widgets produced by the cost of materials per widget.

Step-by-step explanation:

To calculate the direct manufacturing labor costs, we can use the information in the production function. From the table, we see that for 0.2 widgets, 1 worker is required. For 0.4 widgets, 2 workers are required, and so on. To calculate the cost, we need to know the labor cost per worker. Once we have that information, we can multiply the number of workers by the labor cost to get the total direct manufacturing labor costs.

To calculate the cost of direct materials used, we need information about the cost of materials per widget. Using the production function, we can determine how many widgets are produced by a specific number of workers. Once we have the number of widgets produced, we can multiply it by the cost of materials per widget to calculate the total cost of direct materials used.