Direct labor
Sino-Afro Electronics manufactures different optical switch for networking uses in different industries. During 2013, the company completed an order for a special optical switch for a new customer, Ethio-telecom. This customer did not order any other products during the year. Data concerning that order follow: Data related to Ethio-telecom order Selling price $295 per unit Units ordered 100 units Direct materials $264 per unit Direct labor hours 0.50 hrs per unit Direct labor rate $25 per direct labor hr Currently, the company is concerned whether to accept this special order, thus, contracts your professional advice. The company traditionally uses direct labor hours to allocate manufacturing overhead costs. Total direct labor hours was estimated to be 20,000 in 2013.
Direct labor