QUESTION1 4 points The following are budgeted data: Production (units) 15,000 16

Question

QUESTION1 4 points The following are budgeted data: Production (units) 15,000 16,000 Sales (units) 12,000 17,000 15,000 13, May. Each unit requires 0.75 hours of direct labor at a cost of $6.50 per hour. What is the cost of direct labor for May? O $73,125 $82,875 O $63,375 O $78,000 QUESTION2 4 points The Tobler Company had budgeted production for the year as follows: 2 Production in units 10,000 12,000 16,000 14,000 Four pounds of raw materials are required for each unit produced. Raw materials on hand at the start of the year total 4,000 lbs. The raw materials inventory at the end of each quarter should equal 1 needs in materials. Budgeted purchases of raw materials in the third quarter would be (in lbs.) O 63,200 lbs. C 62,400 lbs. 0 56,800 lbs. O50,400 lbs the next quarter's production All

Explanation / Answer

1. Production = 16000 Units

Direct Labor Hrs = 0.75

Direct Labor Cost = 6.50$ per Hour

Cost of Direct Labor for May = 16000 * 0.75 * 6.50$ = $78000 (Option D)

2. Budgeted Purchases of materials in Q3

Budgeted Purchases = 10% of Q4 Material Needs + Consumption in Q3 - 10% of Q3 Material Needs

Budgeted Purchases = 10% * 14000 * 4 Pounds + 16000 * 4 Pounds - 10% * 16000 * 4

Budgeted Purchases = 5600 Pounds + 64000 Pounds - 6400 Pounds

Budgeted Purchases = 63200 Pounds (Option A)

3. Supplies cost in Flexible Budget

Supplies Cost = $2240 Per Month + $6 Per Frame

Supplies Cost = $2240 + $6 * 810

Supplies Cost = $2240 + $4860

Supplies Cost = $7100 (Option D)

4. It is False. Because of decrease in activity doesn't result in decrease in VC per unit in flexible budget but will result in total VC decrease but not in cost per unit

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