3 Pierr Manufacturing Inc. has provided the following information concerning its
ID: 2457040 • Letter: 3
Question
3
Pierr Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Fixed Cost
per Month
Cost per
Machine-Hour
Direct materials
$
5.70
Direct labor
$
42,900
Supplies
$
0.20
Utilities
$
1,200
$
0.10
Depreciation
$
14,600
Insurance
$
11,500
For example, utilities should be $1,200 per month plus $0.10 per machine-hour. The company expects to work 4,300 machine-hours in July. Note that the company’s direct labor is a fixed cost.
Required:
Complete the company’s planning budget for manufacturing costs for July.
Pierr Manufacturing Inc.
Planning Budget for Manufacturing Costs
For the Month Ended July 31
Direct materials
Direct labor
Supplies
Utilities
Depreciation
Insurance
Total manufacturing cost
Pierr Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Explanation / Answer
Solution-
Pierr Manufacturing Inc.
Planning Budget for Manufacturing Costs
For the Month Ended July 31
Direct materials
$24,510
Direct labor
$42,900
Supplies
$1,290
Utilities
$1,630
Depreciation
$14,600
Insurance
$11,500
Total manufacturing cost
$96,430
Calculation-
Direct Material = $5.70*4,300 = $24,510
Supplies = $0.30*4,300 = $1,290
Utilities = ($1,200 + ($0.10*4,300) = $1,630
Pierr Manufacturing Inc.
Planning Budget for Manufacturing Costs
For the Month Ended July 31
Direct materials
$24,510
Direct labor
$42,900
Supplies
$1,290
Utilities
$1,630
Depreciation
$14,600
Insurance
$11,500
Total manufacturing cost
$96,430
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