What is the variable manufacturing overhead per unit

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Reference no: EM133901615

Problem

Parker Corporation makes a range of products. The company's predetermined overhead rate is $28 per direct labor-hour, which was calculated using the following budgeted data: Variable manufacturing overhead $ 180,000 Fixed manufacturing overhead $ 380,000 Direct labor-hours 20,000 Management is considering a special order for 200 units of product O96S at $122 each. The normal selling price of product O96S is $149 and the unit product cost is determined as follows: Direct materials $ 67.00 Direct labor 32.00 Manufacturing overhead applied 44.80 Unit product cost $ 143.80 If the special order were accepted, normal sales of this and other products would not be affected. The company has ample excess capacity to produce the additional units. Assume that direct labor is a variable cost, variable manufacturing overhead is really driven by direct labor-hours, and total fixed manufacturing overhead would not be affected by the special order.

Task

What is the variable portion of the manufacturing overhead rate? How many labor hours per unit are required for the special order? What is the variable manufacturing overhead per unit for this special order? Get the instant assignment help. What is the amount of total variable cost per unit for this special order? What is the unit contribution margin for this special order? What is the increase in profit from accepting this special order?

Reference no: EM133901615

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