Gundy Company expects to produce 1,308,000 units of Product XX in 2017. Monthly

Question

Gundy Company expects to produce 1,308,000 units of Product XX in 2017. Monthly production is expected to range from 72,500 to 105,700 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $7, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are SS and for supervision are $3. Prepare a flexible manufacturing budget for the relevant range value using 16,600 unit increments. (List variable costs before fixed costs.) GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2017

Explanation / Answer

Activity Level Finished Units 72500 89100 105700 Variable Costs: Direct Materials 362500 445500 528500 Direct Labor 507500 623700 739900 Overhead 652500 801900 951300 Total Variable Costs 1522500 1871100 2219700 Fixed Costs Depreciation 54500 54500 54500 Supervision 327000 327000 327000 Total Fixed Costs 381500 381500 381500 Total Costs 1904000 2252600 2601200

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