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QUESTION36. Aldebaran designs, produces and markets two types of fireworks: Ch...
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QUESTION36. Aldebaran designs, produces and markets two types of fireworks: Chinese Dragon and Space Tornado. They are made from chemical components assembled in a single workshop.
The production parameters of these two products are given below:
By fireworks (individually)
|
Chinese Dragon
|
Space Tornado
|
Chemical Components / Product
|
50
|
120
|
Workshop labour (in hours)
|
2 hours
|
2 hours
|
Workshop machine (in hours)
|
5 hours
|
6 hours
|
The unit cost of chemical components is $1. Direct labor costs $4 per hour in the shop. The operating costs of the machines are $3.5 per machine hour in the workshop.
The Chinese Dragon is sold for $250 each while the Space Tornado is sold for $350 each. Distribution is carried out by an import-export company which receives a 5% commission on the sales made.
In July, we produced and sold 1,000 Chinese Dragons and 2,000 Space Tornados.
What is the direct unit cost of a Chinese Dragon?