Question

Xminus−Industries manufactures 3minus−D printers. For each​ unit, $ 3 comma 000$3,000 of direct material is used and there is $ 2 comma 000$2,000 of direct manufacturing labor at $ 20$20 per hour. Manufacturing overhead is applied at $ 25$25 per direct manufacturing labor hour. Calculate the profit earned on 5050 units if each unit sells for $ 9 comma 000$9,000.

Answer 1

$75,000

Explanation:

The computation of profit earned is shown below:-

Sales revenue = $ 9,000 × 50 = $450,000

Direct material = $3,000 × 50 = $ 150,000

Direct labor = $2,000 × 50 = $100,000

Now

Number of direct labor hour per unit is

= $2,000 ÷ $20

= $100

Manufacturing overhead per unit is

= $25 × $100

= $2,500

So,

Manufacturing overhead for 50 units is

= $2,500 × 50

= $125,000

And, finally

Profit = Sales revenue - Direct material - Direct labor - Manufacturing overhead

= $450,000 - $100,000 -$150,000 - $125,000

= $75,000