Activity-Based Budget Macon Industries has the following budget information avai

Question

Activity-Based Budget
Macon Industries has the following budget information available for February:

Use activity based costing to prepare a manufacturing cost budget for February. Clearly distinguish between unit, batch, and facility-level costs.

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Units manufactured 25,000 Factory administration $60,000 Assembly 0.5 hour per unit X $13 Direct materials 2 pounds per unit X $5 Inspection $300 per batch of 1,000 units Manufacturing overhead $6 per unit Product development $20,000 Setup cost $16 per batch of 1,000 units

Explanation / Answer

Answer:-

Macon Industries Manufacturing Cost Budget For the Month of February Particulars Unit (1) Batch (1000 units) Manufactured (25000 units) $ $ $ Factory Administration $60000/25000 units =$2.4 per unit $2.4 per unit*1000 units =$2400 per batch 60000 Assembly .5 hour per unit*$13 =$6.5 per unit 6500 $6.5 per unit*25000 units=162500 Direct material cost 2 pounds per unit*$5 =$10 per unit 10000 $10 per unit*25000 units=250000 Inspection $7500/25000 units=$.30 per unit 300 25 batches*$300 per batch=7500 Manufacturing overhead 6 $6 per unit*1000 units=$6000 $6 per unit*25000 units=$150000 Product development $20000/25000 units =.80 per unit $.80 per unit*1000 units=800 20000 Setup cost $400/25000 units =$.016 per unit 16 25 batches*$16 per batch=400 Total Manufcaturing cost 26.016 26016 650400

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