What is the total manufacturing margin

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Reference no: EM132812459

To be able to compute for the breakeven, Blue Corp. needs to estimate variable and fixed costs. For the first three months of operations, total factory overhead incurred were as follows: January, P80,000; February, P140,000; and March, P200,000. Consequently, variable factory overhead were allocated using direct labor hours, which were 1,000, 3,000, and 5,000 hours for January, February and March, respectively.

Problem 1: Direct materials used per direct labor hour are two units with a cost of P10 per unit. Direct labor is P16 per hour and two hours are required to finish one unit of product. What is the total manufacturing margin if selling price per unit is P500 and 500 units are sold in January?

a. ? 222,000
b. ? 184,000
c. ? 134,000
d. ? 172,000

Reference no: EM132812459

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