Fixed Cost per Month Machine-Hour Cost per $ 5.40 $0.10 Direct materials Direct

Question

Fixed Cost per Month Machine-Hour Cost per $ 5.40 $0.10 Direct materials Direct labor Supplies Utilities Depreciation Insurance $42,700 $ 1,200 15,100 11,600 $ 0.20 For example, utilities should be $1,200 per month plus $0.20 per machine-hour. The company expects to work 4,400 machine-hours in June. Note that the company's direct labor is a fixed cost. Required: Prepare the company's planning budget for June Wyckam Manufacturing Inc. Planning Budget for Manufacturing Costs For the Month Ended June 30 Direct materials Direct labor Supplies Utilities Depreciation Insurance Total manufacturing cost

Explanation / Answer

Wyckam Manufacturing Inc. Planning Budget for Manufacturing Costs For the month Ended June 30 Machine hours 4,400 Direct Materials (4,400 x $5.4) $23,760 Direct Labor $42,700 Supplies (4,400 x $0.1) $440 Utilities($1,200 + 4,400 x $0.2) $2,080 Depreciation $15,100 Insurance $11,600 Total manufacturing cost $95,680

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