A manufacturing company leases a building for $100,000 per year for its manufacturing facilities. In addition,...
Homework Answers
Total units produced = 10,000 units
Price per unit = $43
Calculate the total revenue -
Total revenue = Price per unit * Total units produced
Total revenue = $43 * 10,000 = $430,000
The total revenue is $430,000
Annual lease of building = $100,000
Annual instalment for machinery = $18,000
Labor cost per unit = $14
Total labor cost = Labor cost per unit * Units produced = $14 * 10,000 = $140,000
Material cost per unit = $11
Total material cost = Material cost per unit * Units produced = $11 * 10,000 = $110,000
Calculate the total cost -
Total cost = Annual lease of building + Annual instalment for machinery + Total labor cost + Total material cost
Total cost = $100,000 + $18,000 + $140,000 + $110,000 = $368,000
The total cost is $368,000
Calculate profit -
Profit = Total revenue - Total cost
Profit = $430,000 - $368,000 = $62,000
Thus,
The annual profit is $62,000.
Hence, the correct answer is the option (E).
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manufacturing company leases a building for $100,000 per year for
its manufacturing facilities. In addition,...
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