Question
Video Enterprise Plc manufactures digital video equipment. For each unit , 200 of direct material is used and 500 of direct manufacturing labour at 20
Video Enterprise Plc manufactures digital video equipment. For each unit, 200 of direct material is used and 500 of direct manufacturing labour at 20 per hour. Fixed overhead costs per year are budgeted to amount to 480,000. The company plans to sell 2,400 units next year. Each unit sells for 1,500.
(Insert just the number; do not use space, comma or period to separate groups of thousand.)
a) Calculate the overhead absorption rate (OAR) based on the planned annual direct labour hours: OAR = ____ per direct labour hour
b) What is the overhead absorption rate (OAR), if you allocate the overheads equally to the no. of units? --> OAR = _____ per unit
c) The prime cost = _____ (direct material cost OR indirect material cost) + _____ (direct labour cost OR indirect labour cost) per unit is: ______ per _____ (labour hour OR unit OR month)
d) The full cost per unit is: _____ per _____ (month OR unit OR labour hour)
e) What is the profit that can be expected to be earned next year? _____
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