After many years of working at Easy University, you have decided to look for a different job. After updating your LinkedIn profile, Easy Laptops Pty Ltd a large manufacturer of laptops contacts you about a vacant managerial position in their manufacturing department. They are impressed with you and offer you the job. Your first task is to calculate the cost per unit of the company's main product (the Simple Laptop) based on the information below:

To produce 100,000 of its Simple Laptop (one of the company's many different laptop products) required:

• 1,000,000 computer parts at a cost of $80 per part
• 300,000 hours of direct labour at a cost of $25 per hour

The company also incurs significant amounts of manufacturing overhead cost which needs to be allocated to all of its different laptop products

• Total company-wide manufacturing overhead costs is $1,200,000 over the same period.

Manufacturing overhead costs are allocated using direct labour hours which totaled 600,000 hours over the same period. The 600,000 direct labour hours is used to manufacture the various laptops produced by the company, including the Simple Laptop.

What is the manufacturing cost per unit for the Simple Laptop?

a) $875

b) $881

c) $887

d) $876