Question

Miller and Sons' static budget for 10,300 units of production includes $36,800 for direct materials, $48,500 for direct labor, variable utilities of $7,500, and supervisor salaries of $14,900. A flexible budget for 13,900 units of production would show Round your final answer to the nearest dollar. Do not round interim calculations. a.direct materials of $49,662, direct labor of $65,451, utilities of $10,121, and supervisor salaries of $17,880 b.direct materials of $49,662, direct labor of $65,451, utilities of $10,121, and supervisor salaries of $14,900 c.the same cost structure in total d.total variable costs of $107,700

Answer 1

Answer:

b. direct materials of $49,662, direct labor of $65,451, utilities of $10,121, and supervisor salaries of $14,900

Explanation:

$\left|\begin{array}{c|c|c|c} Item& Cost for 10,300 Units& Unit Cost& Cost for 13900 Units\\--&--&--&--\\ Direct materials&\ 36,800&\dfrac{36800}{10300} &\dfrac{36800}{10300}\times 13900 Units=\ 49662\\\\ Direct Labor&\ 48,500&\dfrac{48500}{10300} &\dfrac{48500}{10300}\times 13900 Units=\ 65451\\\\ Variable Utilities&\ 7,500&\dfrac{7500}{10300} &\dfrac{7500}{10300}\times 13900 Units=\ 10121\end{array}\right|$The Supervisor's Salary is a fixed cost.

Therefore, a flexible budget for 13,900 units of production would show:

• Direct materials of $49,662,
• Direct labor of $65,451,
• Utilities of $10,121
• Supervisor salaries of $14,900