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First, what's our manufacturing cost per unit and profit each month if we produce and sell 9,500 R1s and 4,750 R2s?

Second, what's our profit if each month we only sell 9,500 R1s and 4,750 R2s, but we produce 10,000 R1 and 5,000 R2s, assuming the unsold units go into finished goods inventory?"

Exhibit 1 LEMMEIN SECURITY, INC. (A) 2021 Monthly Budget
	R1	R2	Total
Sales Revenue
Produce and sell per month	10,000 units	5,000 units
Projected selling price	$ 20.00	$ 23.00
Sales revenue	$200,000	$115,000	$315,000
Manufacturing Costs
Parts (Direct materials)	$55,000	$32,000	$87,000
Direct labor	35,000	21,000	56,000
Overhead (a)	70,000	42,000	112,000
Total manufacturing cost	$160,000	$95,000	$255,000
Manufacturing cost per unit	16.00	19.00
Selling and administrative			40,000
Total expense			295,000
Profit before tax			$20,000

Supplies	$21,000
Occupancy (utilities, rent, maintenance)	15,000
Equipment maintenance	17,000
Equipment depreciation	8,000
Quality control and production engineering	15,000
Manufacturing administration	36,000
Total manufacturing overhead	$112,0O0

In this budget, overhead was allocated to the two products on the basis of direct labor estimated for the two products: $2.00 of overhead for each $1.00 of direct labor.

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