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Waltham Motors Division Case Analysis Essay

Decent Essays

1. Using budget data, how many motors would have to be sold for Waltham Motors Division to break even?

Budgeted CM / Budgeted units sold = $351,200 / 18,000 = $19.51 per unit

Budgeted FC / 19.51 = 260,000 / 19.51 = 13,326 units

2. Using budget data, what was the total expected cost per unit if all manufacturing and shipping overhead (both variable and fixed) was allocated to planned production? What was the actual per unit cost of production and shipping?

Total budgeted costs (both variable and fixed) = 512,800 + 26,000 = $772,800 Total budgeted units = 18,000 Total expected cost per unit = …show more content…

| |Budgeted |Actual |Variance |
|Units |14,000 |14,000 |-- |
|Sales |$672,000 |$686,000 |$14,000 U |
|Variable Manufacturing costs: | | | |
| Direct material |84,000 |85,400 |1,400 U |
| Direct labor |224,000 |246,000 |22,000 U |
| Indirect labor |44,800 |44,400 |400 F |
| Idle time |11,200 |14,200 |3,000 U |
| Cleanup time |8,400 |10,000 |1,600 U |
| Miscellaneous supplies |4,044 |4,000 |44 F |
| Total variable manufacturing costs |376,444 |404,000

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