Gundy Company expects to produce 1,262,040 units of Product XX in 2014. Monthly
ID: 2479578 • Letter: G
Question
Gundy Company expects to produce 1,262,040 units of Product XX in 2014. Monthly production is expected to range from 87,530 to 121,870 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $7, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $4 and for supervision are $1.
Prepare a flexible manufacturing budget for the relevant range value using 17,170 unit increments. (List variable costs before fixed costs.)
Explanation / Answer
Answer
Figures in $
Particulars
Cost per unit
Alternative 1
Alternative 2
Alternative 3
Units to be produced
87530
104700
121870
(87530+17170)
(104700+17170)
Budgeted variable manufacturing costs
Direct materials
5
437650
523500
609350
direct labor
7
612710
732900
853090
Overhead
10
875300
1047000
1218700
Total budgeted variable manufacturing costs
a
22
1925660
2303400
2681140
Budgeted fixed manufacturing costs
Depreciation
4
420680
420680
420680
(1262040*4)/12
Supervision
1
105170
105170
105170
(1262040*1)/12
Total budgeted fixed manufacturing costs
b
5
525850
525850
525850
Total budgeted manufacturing cost (a+b)
2451510
2829250
3206990
Figures in $
Particulars
Cost per unit
Alternative 1
Alternative 2
Alternative 3
Units to be produced
87530
104700
121870
(87530+17170)
(104700+17170)
Budgeted variable manufacturing costs
Direct materials
5
437650
523500
609350
direct labor
7
612710
732900
853090
Overhead
10
875300
1047000
1218700
Total budgeted variable manufacturing costs
a
22
1925660
2303400
2681140
Budgeted fixed manufacturing costs
Depreciation
4
420680
420680
420680
(1262040*4)/12
Supervision
1
105170
105170
105170
(1262040*1)/12
Total budgeted fixed manufacturing costs
b
5
525850
525850
525850
Total budgeted manufacturing cost (a+b)
2451510
2829250
3206990
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