Gundy Company expects to produce 1,200,000 units of Product XX in 2017. Monthly

Question

Gundy Company expects to produce 1,200,000 units of Product XX in 2017. Monthly production is expected to range from 80,000 to 120,000 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $6, and overhead $8. Budgeted fixed manufacturing costs per unit for depreciation are $2 and for supervision are $1.

Prepare a flexible manufacturing budget for the relevant range value using 20,000 unit increments. (List variable costs before fixed costs.)

GUNDY COMPANY
Monthly Flexible Manufacturing Budget
For the Year 2017

GUNDY COMPANY
Monthly Flexible Manufacturing Budget
For the Year 2017

Total Variable CostsFinished UnitsVariable CostsDirect MaterialsActivity LevelFixed CostsTotal Fixed CostsDepreciationDirect LaborOverheadTotal CostsSupervision

Activity LevelVariable CostsTotal Fixed CostsDirect MaterialsFixed CostsTotal Variable CostsDepreciationTotal CostsDirect LaborOverheadFinished UnitsSupervision

Variable CostsFinished UnitsDepreciationActivity LevelDirect LaborSupervisionDirect MaterialsFixed CostsOverheadTotal CostsTotal Variable CostsTotal Fixed Costs

Direct LaborFinished UnitsActivity LevelDirect MaterialsFixed CostsOverheadSupervisionTotal CostsVariable CostsTotal Fixed CostsTotal Variable CostsDepreciation

$

$

$

Direct MaterialsFixed CostsTotal Variable CostsDirect LaborVariable CostsDepreciationSupervisionActivity LevelFinished UnitsOverheadTotal CostsTotal Fixed Costs

Total Variable CostsSupervisionActivity LevelDirect MaterialsTotal CostsFinished UnitsVariable CostsTotal Fixed CostsFixed CostsOverheadDepreciationDirect Labor

DepreciationFixed CostsTotal Variable CostsVariable CostsTotal CostsDirect LaborDirect MaterialsTotal Fixed CostsOverheadActivity LevelFinished UnitsSupervision

$

$

$

Direct MaterialsTotal Fixed CostsDirect LaborTotal Variable CostsFinished UnitsFixed CostsOverheadActivity LevelSupervisionTotal CostsVariable CostsDepreciation

Finished UnitsDirect MaterialsDirect LaborOverheadVariable CostsSupervisionTotal CostsActivity LevelFixed CostsTotal Fixed CostsTotal Variable CostsDepreciation

Total CostsActivity LevelDirect MaterialsDirect LaborTotal Variable CostsFinished UnitsTotal Fixed CostsDepreciationSupervisionVariable CostsFixed CostsOverhead

Finished UnitsVariable CostsSupervisionFixed CostsTotal CostsDepreciationTotal Variable CostsTotal Fixed CostsActivity LevelDirect MaterialsOverheadDirect Labor

Variable CostsTotal Fixed CostsSupervisionActivity LevelTotal Variable CostsDepreciationTotal CostsDirect LaborDirect MaterialsFinished UnitsFixed CostsOverhead

$

$

$

Explanation / Answer

**Fixed cost is calculated at budgeted capacity and then dividing equally among all months [12 months]

Units 80000 100000   [80000+20000] 120000   [100000+20000] Variable cost Direct material 400000   [80000*5] 500000 600000    [120000*5] Direct labor 480000   [80000*6] 600000 720000   [120000*6] Overhead 640000   [80000*8] 800000 960000    [120000*8] Total variable cost 1520000 1900000 2280000 Fixed cost Depreciation[1200000*2=2400000/12 = 200000 200000 200000 200000 supervision[1200000*1=1200000/12 = 100000 100000 100000 100000 Total fixed cost 300000 300000 300000 Total cost 1820000 2200000 2580000

Related Questions

Navigate

• Browse (All)
• Browse G
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.