In: Economics
Sales volume |
250,000 units per year |
Sales price |
$4 per unit |
Costs |
|
Direct materials (4 kg at $.40 per kg) |
$1.60 per unit |
Direct labor (0.1 hours at $8 per hour) |
$0.80 per unit |
Overhead |
$330,000 per year |
Note: The annual overhead includes $200,000 per year depreciation on the asset. It also includes apportioned fixed overhead of a further $50,000 per year.