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I am given this data for the year 2017 and have to create a CVP Income Statement:
2017 Cost Data
Manufacturing Costs for high chairs (based on production volume of 30,000 units):
Direct Materials $22 per unit
Direct Labor $16 per hour (each worker can make 2 units in 1 hour) $3 per unit
Packaging $2.50 per unit
Variable Manufacturing Overhead Fixed Manufacturing Overhead $140,000
Selling and Administrative Costs for high chairs (based on sales volume of 30,000 units):
Sales Commissions $5.80 per unit
Shipping Costs $4.00 per unit
Advertising and Promotion (fixed) $15,000
Fixed Selling and Admin Expenses $12,000
I want to make sure I'm calculating the Direct Labor cost correctly, would I take (30,000 units / 2) x $16/hour?
2017 Cost Data
Manufacturing Costs for high chairs (based on production volume of 30,000 units):
Direct Materials $22 per unit
Direct Labor $16 per hour (each worker can make 2 units in 1 hour) $3 per unit
Packaging $2.50 per unit
Variable Manufacturing Overhead Fixed Manufacturing Overhead $140,000
Selling and Administrative Costs for high chairs (based on sales volume of 30,000 units):
Sales Commissions $5.80 per unit
Shipping Costs $4.00 per unit
Advertising and Promotion (fixed) $15,000
Fixed Selling and Admin Expenses $12,000
I want to make sure I'm calculating the Direct Labor cost correctly, would I take (30,000 units / 2) x $16/hour?