Before the year began, McCrae, Inc. estimated its manufacturing overhead costs f

Question

Before the year began, McCrae, Inc. estimated its manufacturing overhead costs for the year to be S300,000 and estimated that 10,000 machine hours would be logged during production. The company uses machine hours to apply manufacturing overhead to production During the year, the company received an order from a customer 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 Assuming a sales price of $733, the gross profit reported on each unit in the order equals $ calculations to the nearest dollar i.e. 560 not 559.8) . (round ALL

Explanation / Answer

Overhead rate = 300000/10000 = 30 per machine hour

Sales (733*12) 8796 Direct material (1000) Direct labour (1500) overhead (23*30) (690) gross profit 5606 Unit 12 Gross profit on each unit 467

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