Gundy Company expects to produce 1,276,800 units of Product XX in 2017. Monthly

Question

Gundy Company expects to produce 1,276,800 units of Product XX in 2017. Monthly production is expected to range from 73,800 to 119,800 units. Budgeted variable manufacturing costs per unit are direct materials $3, direct labor $7, and overhead $9. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $1. 2 0 Prepare a flexible manufacturing budget for the relevant range value using 23,000 unit increments. (List variable costs before fixed costs.) GUNDY COMPANY Monthly Flexdble Manufacturing Budget For the Year 2017 Direct Labor Total Variable Costs Variable Costs Finished Units Depreciation Activity Level Fixed Costs Overhead Supervision Total Costs Total Fixed Costs

Explanation / Answer

Activity Level Finished Units 73800 96800 119800 Variable Costs: Direct Materials 221400 290400 359400 Direct Labor 516600 677600 838600 Overhead 664200 871200 1078200 Total Variable Costs 1402200 1839200 2276200 Fixed Costs: Depreciation 638400 638400 638400 Supervision 106400 106400 106400 Total Fixed Costs 744800 744800 744800 Total Costs 2147000 2584000 3021000

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