What is the break-even value for the overhead rate

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Reference no: EM132148757

To make a batch of 1,000 units, it is estimated that 90 direct labor hours are required at a cost of $8 per hour. Direct material costs are estimated at $1,350 per batch. The overhead costs are calculated based on an overhead rate of $7.50 per direct labor hour. The item can be readily purchased from a local vendor for $4 per unit. What is the break-even value for the overhead rate (dollars per direct labor hour)? Assume that the material costs, labor hours, and labor costs do not change.

Reference no: EM132148757

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