Briet Exercise 22-4 Gundy Company expects to produce 1,251,600 units of Product

Question

Briet Exercise 22-4 Gundy Company expects to produce 1,251,600 units of Product XX in 2017. Monthly production is expected to range from 79,400 to 118,000 units for depreciation are $6 and for supervision are 1 Prepare a flexible manufacturing budget for the relevant range value using 19,300 unit increments. (List variable costs before fixed costs.) Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $7, and overhead $11. Budgeted fixed manufacturing costs per unit GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2017

Explanation / Answer

GUNDY COMPANY Monthly Flexible Manufacturing Budget For the year 2017 Expected production (units) 79400 units 98700 units 118000 units Variable costs: Direct material ($5 per unit) 397000 493500 590000 Direct labor ($7 per unit) 555800 690900 826000 Overhead ($11 per unit) 873400 1085700 1298000 Total variable expenses 1826200 2270100 2714000 Fixed costs: Depreciation 7509600 7509600 7509600 (1251600*6) (1251600*6) (1251600*6) Supervision 1251600 1251600 1251600 (1251600*1) (1251600*1) (1251600*1) Total fixed costs 8761200 8761200 8761200 Total costs 10587400 11031300 11475200 Cost per unit            133.34            111.77              97.25

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