Question

another Question
given
Product is labour intense
product need 5kg and 0.8 hr to manufactre
labour cost 100$/hr
Material 10$/kg
annual est sale 30000
total labour for a yr 2000
fine
a)unit material cost
b)unit labour cost
c)unit direct cost
d)unit manufacturing cost

Answer 1

Please refer to the table below for your solution

Total Available Labour	2000
labour required for one product	0.8
No. of product that can be produced	2500
Material required for one product	5
Material Cost per unit	10
Unit Material cost	50
Labour required for one product	0.8
Labour Cost per unit	100
Unit Labour cost	80
Unit Direct Cost	130
Unit Manufacturing Cost	130

Unit Direct cost = Unit labour cost + unit material cost

Direct costs are costs which are directly accountable to a cost object, in this case only  material and labour cost are given and no other overhead or depreciation.

Manufacturing cost is the sum of costs of all resources consumed in the process of making a product. The manufacturing cost is classified into three categories: direct materials cost, direct labor cost and manufacturing overhead

No manufacturing overhead is given so Manufacturing cost is the sum of direct materials cost and direct labor cost only in this case