1. Units to be produced annually: 200,000 tins Direct labor: 1 hour per 100 tins
ID: 2417559 • Letter: 1
Question
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
Plant Utilities $9.25
Factory Equipment Maintenance $3.50
Fixed overhead costs per quarter:
Factory Worker's Insurance $3,000
Factory Equipment Depreciation $2,000
Plant Rent $12,000
What is the budgeted total manufacturing overhead for the year?
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, office utilities $1,200, and repairs expense $200.
Selling price: $10 per tin
What is the budgeted total selling and administrative expenses for the quarter?
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 manufacturing overhead ( For the year)
Direct labor 200,000/100 = 2,000 hrs
2) Budgeted selling and administrative expenses for the quarter
Variable selling expenses
Variable commission (60,000*10*5%) $30,000
Delivery expense (60,000*10*.5%) 3,000
Advertising (60,000 *10 *1.5%) 9,000
Total variable expense 42,000
Fixed selling expense
Sales salaries 40,000
Office sent 1,500
Office utilities 1,200
repair expense 200
total fixed expense $42,900
total selling and administrative expense $84,900
Cash collected in March
1) Budgeted manufacturing overhead ( For the year)
Direct labor 200,000/100 = 2,000 hrs
Variable overhead cost Indirect materials (2,000 *$2.05) $4,100 Indirect labor (2,000*1.20) 2,400 Plant Utilties (2,000 *9.25) 18,500 Factory Eqipment maintenance(2,000 *3.50) 7,000 Total variable overhead $32,000 Fixed overhead costs Factory workers' insurance (3,000 *4) $12,000 Factory Equipment Depreciation (2,000 *4) 8,000 Plant Rent (12,000 *4) 48,000 Total manufacturing overhead $100,000Related Questions
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