Question

Huston Makena is the owner and CEO of H3 Solar Inc., a startup that makes and installs solar panels. In January, H3 Solar received 4 independent orders. The company applies overhead at a rate of $6 per direct labor hour. Direct labor wages average $10 per hour.

	Job 213	Job 214	Job 217	Job 225
Total sales revenue		$4,375	$5,600	$1,150
Price per unit	$12		$14	$5
Materials used in production	$365		$488	$207
Direct labor cost		$700	$2,000	$230
Overhead applied	$240			$138
Total manufacturing cost	$1,005	$3,073		$575
Number of units		350	400
Unit cost	$10.05		$9.22

Fill in the blank

Answer 1

Job 213

Number of units = Total manufacturing cost / Unit cost

= 1005/10.05

= 100 units.

Total manufacturing cost = Materials + Direct labour cost + overhead

Direct labour cost

= 1005 - 365 - 240

= $400

Total sales revenue = Number of units* Selling price

= 100*12

= $1,200

Job 214

Price per unit = Total sales / Number of units

= 4,375/350

= $12.50

Total direct labour hour = Direct labour cost/ 10

= 700/10

= 70 hours

Overhead applied

= 6*70

= $420

Material = Total manufacturing cost - Direct labour cost - Overhead

= 3,073 - 700 - 420

= $,1953

Unit cost = Total cost / Number of units

= 3,073/350

= $8.78

Job 217

Total direct labour hours = 2,000/10

= 200 hours

Overhead cost = 200*6 = 1,200

Total manufacturing cost

= 488 + 1,200 + 2,000

= $3,688

Job 225

Number of units = Total sales / Selling price per unit

= 1,150/5

= 230 units.

Unit cost = Total Manufacturing cost / Number of units

= 575/230

= $2.50 per unit.

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