Gundy Company expects to produce 1,221,360 units of Product XX in 2012. Monthly

Question

Gundy Company expects to produce 1,221,360 units of Product XX in 2012. Monthly production is expected to range from 85,690 to 130,390 units. Budgeted variable manufacturing costs per unit are: direct materials $3, direct labor $7, and overhead $10. Budgeted fixed manufacturing costs per unit for depreciation are $5 and for supervision are $3.

Prepare a flexible manufacturing budget for the relevant range value using 22,350 unit increments. (List variable costs before fixed costs.)

Prepare a flexible manufacturing budget for the relevant range value using 22,350 unit increments. (List variable costs before fixed costs.) GUNDY COMPANY For the Year 2012

Explanation / Answer

ALL the above expenses are per month expenses :

Gundy company ALL ARE PER MONTH volume 1221360 monthly range 85690-130390 85690 108040 130390 Variable manufacturing cost: Direct material @ 3 per unit 257070 324120 391170 Direct labor @7 per unit 599830 756280 912730 Overhead @ 10 per unit 856900 1080400 1303900 Total variable cost 1713800 2160800 2607800 Fixed manufacturing cost: Depreciation @ 5 428450 540200 651950 Supervision @ 3 257070 324120 391170 Total Fixed cost 685520 864320 1043120 Total Cost 2399320 3025120 3650920

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