Question

Unter Components manufactures low-cost navigation systems for installation in ride-sharing cars. It sells these systems to various car services that can customize them for their locale and business model. It manufactures two systems, the Star100 and the Star150, which differ in terms of capabilities. The following information is available. Star100 $ 62 Star150 $ 72 40 50 20 Costs per Unit Direct materials Direct labor Variable overhead Fixed overhead Total cost per unit Price Units sold 117 87 $ 209 $ 300 4,000 $ $ 264 400 2,000 The average wage rate is $25 per hour. Variable overhead varies with the quantity of direct labor-hours. The plant has a capacity of 20,000 direct labor-hours, but current production uses only 10,400 direct labor-hours.
a-1, a-2, and b-1 have been completed, and I have most of the calculations for c-1 as seen in the image above. I can't seem to figure out b-2, the rest of c-1, and c-2. Calculations would be appreciated with the answer.

Answer 1

Labor Hours per unit = Labor cost/Rate per hour
Star100 = 40/25 = 1.6 hours
Star150 = 50/25 = 2 hours
b-2
Change in profits = Contribution Margin from special order – contribution margin lost on regular sales
= 723600 – 2100*178
349800
	Star 100	Star 150	Total
Special Order
Contribution Margin per unit	88	113
Number of units	3600	3600
Total Contribution Margin	316,800	406,800	723,600
Regular Production:
Contribution Margin per unit	178	253
Number of units	4,000	2,000
Total Contribution Margin	712,000	506,000	1,218,000
Total Contribution Margin for both			1,941,600
Additional direct labor cost			42,000
Additional variable overhead			20,160
Total CM with additional cost			1,879,440
c-2 change in profits = 1879,440- 1,218,000
=$661,440

B co 1 Labor Hours per unit = Labor co 2 Star 100 = 40/25 = 1.6 hours 3 Star 150 = 50/25 = 2 hours 5b-2 6 Change in profits = Contribution 7 = 723600 – 2100*178 8=723600-2100*178 10 Star 100 Star 150 Total =88 113 3600 3600 =B12*B13 =C12*C13] =SUM(B14:C14) 11 Special Order 12 Contribution Margin per unit 13 Number of units 14 Total Contribution Margin 15 Regular Production: 16 Contribution Margin per unit 17 Number of units 18 Total Contribution Margin 19 Total Contribution Margin for both 20 Additional direct labor cost 21 Additional variable overhead 22 Total CM with additional cost 178 253 4000 2000 =B16*B17 =C16*C17] =SUM(B18:C18) D14+D18 =3360*12.5 =3360*6 1 =D19-SUM(D20:021) 23 25 26 C-2 change in profits = 1879,440 27 =$661,440

Additional hours in C-1 = (4000+3600)*1.6 + (4000+2000)*2 - 20,000 = 3360 hours