Question

XYZ Co. manufactures printers. For each unit, $3,600 of direct material is used and there is $2,400 of direct manufacturing labor at $20 per hour. Manufacturing overhead is applied at $18 per direct manufacturing labor hour. Calculate the profit earned on 60 units if each unit sells for $8,600.

Answer 1

The profit earned on 60 units would be $ 26,400.

Step-by-step explanation:

Given that XYZ Co. manufactures printers, and for each unit, $ 3,600 of direct material is used and there is $ 2,400 of direct manufacturing labor at $ 20 per hour, and manufacturing overhead is applied at $ 18 per direct manufacturing labor hour, to calculate the profit earned on 60 units if each unit sells for $ 8,600 the following calculation must be performed:

2400/20 = 120

Unit costs = 3600 + 2400 + (120 x 18) = 8160

Earnings = (8600 - 8160) x 60 = 26,400

Therefore, the profit earned on 60 units would be $ 26,400.