During the month of April, direct labor cost totaled $15,000 and direct labor cost was 40% of prime cost. If total manufacturing costs during April were $77,000, the manufacturing overhead was:

Manufacturing overhead= $39,500

Explanation:

Giving the following information:

Direct labor= $15,000

Direct labor cost was 40% of prime cost.

Total manufacturing costs= $77,000

First, we need to calculate the prime cost:

Prime cost= direct material + direct labor

Prime cost= 15,000/0.4= 37,500

Now, we can determine the manufacturing overhead:

Manufacturing overhead= total manufacturing costs - prime costs

Manufacturing overhead= 77,000 - 37,500

Manufacturing overhead= $39,500

1. $2,892,000

2. 21.58%

Explanation:

1. Calculation to determine What amount of sales (in dollars) is needed to produce this target income

First step is to calculate the Contribution margin ratio

Contribution margin ratio =$784,000 /$ 3,136,000 Contribution margin ratio= 25%

Now let calculate the Required sales using this formula

Required sales = (Fixed cost+Target income)/Contribution margin ratio

Let plug in the formula

Required sales= ($567,000 +$156,000)/0.25 =

Required sales=$723,000/0.25

Required sales=$2,892,000

Therefore the amount of sales (in dollars) needed to produce this target income will be $2,892,000

2. Calculation to determine margin of safety (in percent)

First step is to calculate the Break even sales

Break even sales = ($567,000/0.25)

Break even sales= $2,268,000

Now let calculate Margin of safety (%

Margin of safety (%) =$2,892,000- $2,268,000)/$2,892,000

Margin of safety (%)=$624,000/$2,892,000

Margin of safety (%)=0.2158

Margin of safety (%)=21.58%

Therefore margin of safety (in percent) will be 21.58%