Your boss asked you to estimate the required number of units sold to achieve a profit of
$26,500 per year. Currently, the product is sold at $1800 per unit. You have collected the following information: $$\begin{array} { | l | l | }
\hline \text { Cost Elements } & \text { Cost Rate } \
\hline \text { Direct labor } & \begin{array} { l }
40 \text { hours per batch of } 60 \
\text { units }
\end{array} \
\hline \text { Direct labor costs } & \$ 60 \text { per hour } \
\hline \text { Material costs } & \$ 5100 \text { per batch of } 60 \text { units } \
\hline \text { Overhead costs } & 125 \% \text { of direct labor } \
\hline \text { Quality control } & 45 \% \text { of direct labor } \
\hline \text { Packaging and shipping } & \$ 33 \text { per unit } \
\hline
\end{array}$$ If the units sold must account for total production costs and desired profit, how many units of production would you recommend to your boss?

Question

Your boss asked you to estimate the required number of units sold to achieve a profit of
$26,500 per year. Currently, the product is sold at $1800 per unit. You have collected the following information: $$\begin{array} { | l | l | } 
\hline \text { Cost Elements } & \text { Cost Rate } \
\hline \text { Direct labor } & \begin{array} { l } 
40 \text { hours per batch of } 60 \
\text { units }
\end{array} \
\hline \text { Direct labor costs } & \$ 60 \text { per hour } \
\hline \text { Material costs } & \$ 5100 \text { per batch of } 60 \text { units } \
\hline \text { Overhead costs } & 125 \% \text { of direct labor } \
\hline \text { Quality control } & 45 \% \text { of direct labor } \
\hline \text { Packaging and shipping } & \$ 33 \text { per unit } \
\hline
\end{array}$$ If the units sold must account for total production costs and desired profit, how many units of production would you recommend to your boss?

Quizplus · Accepted Answer

The Answer of Your boss asked you to estimate the required number of units sold to achieve a profit of
$26,500 per year. Currently, the product is sold at $1800 per unit. You have collected the following information: $$\begin{array} { | l | l | } 
\hline \text { Cost Elements } & \text { Cost Rate } \
\hline \text { Direct labor } & \begin{array} { l } 
40 \text { hours per batch of } 60 \
\text { units }
\end{array} \
\hline \text { Direct labor costs } & \$ 60 \text { per hour } \
\hline \text { Material costs } & \$ 5100 \text { per batch of } 60 \text { units } \
\hline \text { Overhead costs } & 125 \% \text { of direct labor } \
\hline \text { Quality control } & 45 \% \text { of direct labor } \
\hline \text { Packaging and shipping } & \$ 33 \text { per unit } \
\hline
\end{array}$$ If the units sold must account for total production costs and desired profit, how many units of production would you recommend to your boss?

Your Boss Asked You to Estimate the Required Number of Units