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Licemer1 [7]
3 years ago
9

Ply-Disc makes Frisbee-type plastic discs. Each 12 inch diameter plastic disc has the following manufacturing costs

Business
1 answer:
Fudgin [204]3 years ago
6 0

Answer:

The total budgeted cost of units produced $1,425,000

Explanation:

Total unit cost includes all the manufacturing costs like material, labor and overhead. It is used to calculating the inventory value.

As there is no beginning and ending inventory of work in process. The given beginning and ending inventory is Finished goods inventory.

Beginning Inventory = 16,000 units x $4.75 per unit = $76,000

Total Budgeted cost =

Unit produced = 300,000 units

Cost of Goods sold Budget

Direct material             $501,000

Direct labor                  $168,000

Variable overhead      $216,000

Fixed overhead           <u>$540,000</u>

Total Manufacturing cost                               $1,425,000

Add: Beginning Finished goods inventory   $76,000

Less: Ending Finished goods inventory        <u>$147,250   </u>

Cost of Goods Sold                                        <u>$1,353,750</u>

Workings:

Direct material = $1.67 x 300,000 units = $501,000

Direct labor = $0.56 x 300,000 units = $168,000

Variable overhead = $0.72 x 300,000 units = $216,000

Fixed overhead = $1.80 x 300,000 units = $540,000

Total Budgeted cost = $501,000 + $168,000 + $216,000 + $540,000 = 1,425,000

Ending Finished goods inventory = Beginning Finished goods inventory + Production in the period - Sales in the period = 16,000 + 300,000 - 285,000 = 31,000 units

Value of Ending Finished goods inventory = 31,000 units x 4.75 = $147,250

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