Jordan and Taylor are too busy baking brownies to schedule an appointment with y
ID: 2342036 • Letter: J
Question
Jordan and Taylor are too busy baking brownies to schedule an appointment with you. They did send you the enclosed questions for you to answer.
Chapter 21 Questions:
1. Units to be produced annually: 200,000 tins
Direct labor: 1 hour per 100 tins
Variable overhead costs per direct labor hour:
Indirect materials $2.05
Indirect labor $1.20
Utilities $9.25
Maintenance $3.50
Fixed overhead costs per quarter:
Insurance $3,000
Depreciation $2,000
Rent $12,000
What is the budgeted total manufacturing overhead for the year? (5 points)
2. Sales: 60,000 tins per quarter
Variable costs per dollar of sales: sales commissions 5%, delivery expense .5%, and advertising 1.5%.
Fixed costs per quarter: sales salaries $40,000, office rent $1,500, utilities $1,200, and repairs expense $200.
Selling price: $10 per tin
What is the budgeted total selling and administrative expenses for the quarter? (5 points)
3. Sales are 30% cash and 70% on credit. Credit sales are collected 10% in the month of sale, 50% in the month following sale, and 36% in the second month following sale. Sales were December $180,000; January $220,000; February $250,000; and March $300,000.
What was total cash received in March?
Explanation / Answer
1.Budgeted Total maufacturing overhead for the year:
Units to be produced annually = 200,000 tins
Direct Labor = 1 hour per 100 tins
Total direct labour hours = 200,000 tins / 100 tins = 2000 hours
2.Budgeted total selling and administrative expenses for the quarter:
3.Total cash received in March:
Cash received in March = $253,940
Particulars Amount Workings Variable overhead costs: Indirect materials $4,100 (2000 hours x $2.05) Indirect labor $2,400 (2000 hours x $1.20) Utilities $18,500 (2000 hours x $9.25) Maintenance $7,000 (2000 hours x $3.5) Total variable overhead costs (A) $32,000 Fixed overhead costs: Insurance $12,000 ($3000 x 4 quarters) Depreciation $8,000 ($2000 x 4 quarters) Rent $48,000 ($12000 x 4 quarters) Total fixed overhead costs (B) $68,000 Budgeted total manufacturing overhead (A+B) $100,000Related Questions
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