Inc. employs 10 production workers, working 8 hours a day, 20 days per month, at a normal capacity of 2,400 units. The direct labor wage rate is Rs. 6.30 per hour; direct materials are budgeted at Rs. 2 per unit produced. Fixed factory overhead is Rs. 960; supplies average Rs. 0.25 per direct labor hour; indirect labor is 1/6 of direct labor cost; and other charges are Rs. 0.25 per direct labor hour. Required: Prepare the flexible budget for one month at 60%, 80%, and 100% of normal capacity, showing itemized manufacturing costs, total manufacturing cost, and total manufacturing cost per unit.
Inc. employs 10 production workers, working 8 hours a day, 20 days per month, at a normal capacity of 2,400 units. The direct labor wage rate is Rs. 6.30 per hour; direct materials are budgeted at Rs. 2 per unit produced. Fixed factory overhead is Rs. 960; supplies average Rs. 0.25 per direct labor hour; indirect labor is 1/6 of direct labor cost; and other charges are Rs. 0.25 per direct labor hour. Required: Prepare the flexible budget for one month at 60%, 80%, and 100% of normal capacity, showing itemized manufacturing costs, total manufacturing cost, and total manufacturing cost per unit.
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 6PA: Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin...
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Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Inc. employs 10 production workers, working 8 hours a day, 20 days per month, at a normal capacity of 2,400 units. The direct labor wage rate is Rs. 6.30 per hour; direct materials are budgeted at Rs. 2 per unit produced. Fixed factory overhead is Rs. 960; supplies average Rs. 0.25 per direct labor hour; indirect labor is 1/6 of direct labor cost; and other charges are Rs. 0.25 per direct labor hour.
Required: Prepare the flexible budget for one month at 60%, 80%, and 100% of normal capacity, showing itemized manufacturing costs , total manufacturing cost, and total manufacturing cost per unit.
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