1. ABC Apparel received a job order of 50,000 T-shirts from Walmart. Following is headquarter level information of ABCs total annual production hours and costs incurred from all kind of T-shirts it produces

Total direct labor hours	25,000
Total Fixed Manufacturing Overhead Cost	$900,000.00
Variable manufacturing overhead cost per direct labor hour	$15.00

ABC has two manufacturing location, Honduras and Peru. Following is estimation if ABC manufactures 50,000 T-shirts in alternative locations. (Cotton is only direct material in this example.)

	Honduras	Peru
Raw materials needed (cotton)	31,250 pounds	31,250 pounds
cost per pound	$0.64	$0.68
Labor hours needed	4,000	3,900
Wages per hour	$8.00	$10.00

Find out the estimated manufacturing cost of each unit of T-shirt in each location. Indicate which location is more profitable.