Y Company manufactures a single product and is trying to estimate its total manu

Question

Y Company manufactures a single product and is trying to estimate its total manufacturing costs each month. It is estimated that each of unit of the product requires 2.1 pounds of direct material, and the price per pound is $10,50. On average, it takes 27 minutes of direct labor time to manufacture a unit of product. Direct labor employees are hired on an hourly basis and paid $9.65 per hour. The monthly overhead cost function is $3,900+$1.80X, where X is the number of units produced. If 960 units are manufactured in the coming month, what will total manufacturing costs be?

Explanation / Answer

cost for direct material = 2.1*10.5 * 960= 21168

cost for labour= 960*9.65*27/60= 4168.8

overhead cost = 3900+ 1.8*960= 5628

total cost = 21168 + 4168.8 + 5628

=$30964.8   --------------answer

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