Safe-Haul manufactures custom trailer equipment. In June, the company built 400 utility trailers for Cole’s Trailer Sales. Assembly of these units required 1,200 hours of direct labor at a cost of $30,000, direct materials costing $333,000, and 600 hours of machine time. Based on an analysis of overhead costs at the beginning of the year, overhead is applied to utility trailer jobs using the following formula.

Overhead = 150% of Direct Labor Cost + $120 per Machine Hour

a. Compute the total amount of overhead cost applied to the 400 utility trailers.

b. Compute the per-unit cost of manufacturing each trailer in this particular job.

c. Compute the total gross profit that will result from manufacturing these trailers for Cole’s Trailer Sales at a selling price of $2,100 apiece.

Answer rating: 100% (QA)

Req a Overheads applied 150 of 30000 120 per MH for 600 MH 4500... View the full answer