Question
Before the year began, Mighty Mouse with Wings, Inc. estimated that its manufacturing overhead costs for the year would be $400,000. The company esimated that
Before the year began, Mighty Mouse with Wings, Inc. estimated that its manufacturing overhead costs for the year would be $400,000. The company esimated that 5,000 direct labor hours and 10,000 machine hours would be logged during production. The company uses the most appropriate manufacturing overhead allocation base for its highly automated manufacturing environment.
During the year, the company received an order from Rufous Hummingbird for 12 identical units of its most popular product. $1,000 in direct materials were requisitioned and $1,500 in direct labor costs were incurred during the production of the units. A total of 14 machine hours were logged during the production of the units. Direct laborers were paid at a rate of $30 per direct labor hour logged.
Given a sales price of $750, what is the gross profit per unit for Rufous' order?
A.
$495
B.
$255
C.
$399
D.
$507
E.
$208
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started