Budget Electronics is planning to sell 2,200 and produce 2,000 wicker baskets du

Question

Budget Electronics is planning to sell 2,200 and produce 2,000 wicker baskets during June. Each unit requires 120 linear feet of wicker and 0.70 hours of direct labor. Wicker costs $0.35 per linear foot and employees of the company are paid $13.00 per hour. Manufacturing overhead is applied at a rate of 140% of direct labor costs. The company wants to have 10% of the wicker needed for the next month’s production available at the end of each month. The expected production in July is 1,800 baskets. What is the total amount that will be budgeted for direct labor for June? How much manufacturing overhead will be charged to each basket sold during June? What is the unit cost of each basket produced in June?

Explanation / Answer

Particulars Amount 2000 Direct Material                          42.00 Direct Labour                             9.10 Manufacturing Overhead                          12.74 Total Cost                          63.84 Total amount that will be budgeted for direct labor for June                  18,200.00 Manufacturing overhead will be charged to each basket sold during June                          12.74 unit cost of each basket produced in June                          63.84

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