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in the production of 50000 wooden frames during 2009, the following cost were incurred wood 2,5m...

in the production of 50000 wooden frames during 2009, the following cost were incurred wood 2,5m @R6 per meter labour 2hrs @ R15 per hour supervisor salary R3500 per month machine ret R5000 per machine (each machine has the capacity to produce 10000 frames determine total cost for production of 50 000 units what will the machine rent be in 2010 if the company produce 67500 units

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Answer #1

Requirement 1

Direct material ((2.5 x 50000) x $6) $    7,50,000.00
Direct labor ((2 x 50000) x $15) $ 15,00,000.00
Overheads
Supervisor salary $          3,500.00
Machine rent (5000 x 5) $        25,000.00
Total Manufacturing Cost $ 22,78,500.00

Requirement 2

Total rent cost for machine will be $ 35,000

(5000 per month x 7 machines)

7 machine will be required for producing 67500 units.

67500/10000 units = 6.75 machine or 7 machines since machine cant be used in parts .

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