At the beginning of the period, the Cutting Department budgeted direct labor of

ID: 2465431 • Letter: A

Question

At the beginning of the period, the Cutting Department budgeted direct labor of $133,821, direct material of $160,392 and fixed factory overhead of $14,025 for 7,606 hours of production. The department actually completed 9,708 hours of production. What is the appropriate total budget for the department, assuming it uses flexible budgeting?

Select the correct answer.

Below is budgeted production and sales information for Fleming Company for the month of December:

The unit selling price for product X is $5 and for product Y is $14.

What is the budgeted production for product Y during the month?

Select the correct answer.

$393,423 $312,114 $389,547 $308,238

Explanation / Answer

Solution:

Calculation of total budget for the department (flexible budgeting)

Standard Cost per hour

Standard Cost based on standard hours (7,606 Hours)

Flexible Budgeted based on actual hours worked (9,708 Hours) at standard cost (9,708 Hours x Standard Cost per hour)

Direct Material

$21.08756

$160,392

$204,718

Direct Labor

$17.59414

$133,821

$170,804

Fixed Factory Overhead

$1.84394

$14,025

$17,901

total budget for the department

$308,238

$393,423

As per flexible budget total budgeted cost for the department = $393,423

Calculation of Budgeted Production Units for Product Y during the month

Budgeted Production Units for Product Y during the month = 565,502 Units

Product X

Product Y

Region I, anticipated sales (Units)

311,189

277,962

Region II, anticipated sales (Units)

188,506

149,240

Total Anticipated Sales (Units)

499,695

427,202

Add: Desired ending inventory

34,086

157,545

Less: Estimated beginning inventory

(30,171)

(19,245)

Budgeted Production (Units)

503,610

565,502