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30 November, 00:34

A company has the following annual budget dа ta: Beginning finished goods inventory 53,000units Sales 83,000units Ending finished goods inventory 43,000units Direct materials$14per unit Direct labor$25per unit Variable factory overhead$6per unit Selling costs$3per unit Fixed factory overhead$93,000 What are total budgeted production costs for the year

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  1. 30 November, 04:24
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    Total budgeted production costs $ 3378,000

    Explanation:

    Production Units = Ending Units + sales - Beginning Units

    Production units = 43000 + 83000-53000 = 73000

    Direct materials $14per unit * 73000 = $ 1022,000

    Direct labor $25per unit * 73000 = $ 1825,000

    Variable factory overhead $6per unit * 73000 = $ 438,000

    Fixed factory overhead $93,000

    Total Manufacturing Costs $ 3378,000

    Total Production Costs do not include Selling costs. Production costs include costs required to convert raw material into specific products. Selling costs are related to the sale of a product.

    The production costs include the costs of manufacturing, FOH, direct materials and direct labor.
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