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

What is the number of units being produced for Job# 213?

Answer 1

Overhead rate is 6 per direct labour hour

Direct labour wages $10 per hour

	Job 213	Job 214	Job 217	Job 225
Total sales revenue	1200 (WN-2)	4375	5600	1150
Price per unit	12		14	5
Materials used in production	365		488	207
Direct labor cost	400 (WN-3)	700	2000	230
Overhead applied	240			138
Total manufacturing cost	1005	3073		575
Number of units	100 (WN-1)	350	400
Unit cost	10.05		9.22

WN-1: Number of units

Total manufacturing cost	1005
Unit cost	10.05
Number of units (manufacturing cost/unit cost)	100 (1005/10.05)

WN-2: Total sales revenue:

Units sold	100
Price per unit	12
Total sales revenue (units sold * price per unit)	1200 (100*12)

WN-3: Direct labor cost for Job 213

Over head applied	240
Overhead rate per direct labor hour	6
No. of direct labour hours required (overhead applied/ overhead rate per hr)	40 (240/6)
Direct labor wages per hour	10
Direct labour cost (No. of hours * wages per hour)	400 (10* 40)