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Damm [24]
3 years ago
14

Gundy Company expects to produce 1,207,200 units of Product XX in 2017. Monthly production is expected to range from 75,600 to 1

17,600 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 $4 and for supervision are $1. Prepare a flexible manufacturing budget for the relevant range value using 21,000 unit increments.
Business
1 answer:
kenny6666 [7]3 years ago
5 0

Answer and Explanation:

The preparation of the flexible manufacturing budget is presented below:

                                              Activity level    

Finished units                 75,600            96,600           117,600

                                                      (75,600 + 21,000)      

Variable costs    

Direct materials($3) $226,800 $289,800 $352,800

Direct labor ($7)          $529,200 $676,200 $823,200

Overhead ($10)         $756,000       $966,000       $1,176,000

Total variable costs $1,512000       $1,932,000      $2,352,000

Fixed costs    

Depreciation [($4 ×  1,207,200) ÷  12] $402,400    $402,400   $402,400  

Supervision [($1 ×  1,207,200) ÷  12]     $100,600     $100,600   $100,600

Total fixed costs     $503,000           $503,000          $503,000

Total costs            $2,015,000          $2,435,000       $2,855,000

We simply added the total variable and total fixed cost so that the total cost could come and the same is shown above

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