Homework Help is Here – Start Your Trial Now!
Business
Accounting
West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1: Direct materials per unit 2.0 pounds of steel at 50.80 per pound 1.2 pounds of alloy at $16.00 per pound Direct labor per unit 0.04 hours at $30 per hour Overhead per unit Indirect materials Indirect labor Utilities Machine depreciation Other overhead Total overhead per unit $ 0.40 0.80 0.60 1.10 0.60 $ 3.50 The machine depreciation and other overhead costs are fixed and are based on production of 100,000 units annually, Plant capacity is 120,000 units annually. All other overhead costs are variable, The following are forecast for year 2. A wage increase of 6 percent for both direct and indirect labor, which was negotiated recently. will go into effect. Steel prices are expected to decrease by 5 percent while alloy prices are expected to increase by 10 percent. Machine depreciation costs are expected to increase by 4 percent. All other unit overhead costs are expected to remain constant. West Partners expects to sell 84,000 units in year 2. The current inventory of fittings is 8,000 units. Management is forecasting much higher sales volume in year 3, so wants to have 11.000 units on hand by the end of year 2. Steel and alloy inventories will not change. Sales are approximately uniform over the year. Required: a. Prepare a production budget for the coming year. b. Estimate the direct materials, direct labor, and overhead costs for the coming year.

West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1: Direct materials per unit 2.0 pounds of steel at 50.80 per pound 1.2 pounds of alloy at $16.00 per pound Direct labor per unit 0.04 hours at $30 per hour Overhead per unit Indirect materials Indirect labor Utilities Machine depreciation Other overhead Total overhead per unit $ 0.40 0.80 0.60 1.10 0.60 $ 3.50 The machine depreciation and other overhead costs are fixed and are based on production of 100,000 units annually, Plant capacity is 120,000 units annually. All other overhead costs are variable, The following are forecast for year 2. A wage increase of 6 percent for both direct and indirect labor, which was negotiated recently. will go into effect. Steel prices are expected to decrease by 5 percent while alloy prices are expected to increase by 10 percent. Machine depreciation costs are expected to increase by 4 percent. All other unit overhead costs are expected to remain constant. West Partners expects to sell 84,000 units in year 2. The current inventory of fittings is 8,000 units. Management is forecasting much higher sales volume in year 3, so wants to have 11.000 units on hand by the end of year 2. Steel and alloy inventories will not change. Sales are approximately uniform over the year. Required: a. Prepare a production budget for the coming year. b. Estimate the direct materials, direct labor, and overhead costs for the coming year.

Principles of Accounting Volume 2
Principles of Accounting Volume 2
19th Edition
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter6: Activity-based, Variable, And Absorption Costing
Section: Chapter Questions
Problem 2PA: Five Card Draw manufactures and sells 24,000 units of Diamonds, which retails for $180, and 27,000...
See similar textbooks
icon
Related questions
Question

Please do not give solution in image format thanku 

West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1: Direct materials per unit 2.0 pounds of steel at 50.80 per pound 1.2 pounds of alloy at $16.00 per pound Direct labor per unit 0:04 hours at $30 per hour Overhead per unit Indirect materials Indicect labor Utilities Machine depreciation Other overhead Total overhead per unit *$ 0.40 0.80 0.60 1.10 8.60 $ 3.50 The machine depreciation and other overhead costs are fixed and are based on production of 100,000 units annually. Plant capacity is 120,000 units annually. All other overhead costs are variable. The following are forecast for year 2. A wage increase of 6 percent for both direct and indirect labor, which was negotiated recently. will go into effect. Steel prices are expected to decrease by 5 percent while alloy prices are expected to increase by 10 percent. Machine depreciation costs are expected to increase by 4 percent. All other unit overhead costs are expected to remain constant. West Partners expects to sell 84,000 units in year 2. The current inventory of fittings is 8,000 units. Management is forecasting much higher sales volume in year 3, so wants to have 11.000 units on hand by the end of year 2. Steel and alloy Inventories will not change. Sales are approximately uniform over the year. Required: a. Prepare a production budget for the coming year. b. Estimate the direct materials, direct labor, and overhead costs for the coming year.
Transcribed Image Text:West Partners manufactures metal fixtures. Each fitting requires both steel and an alloy that can withstand extreme temperatures. The following data apply to the production of the fittings for year 1: Direct materials per unit 2.0 pounds of steel at 50.80 per pound 1.2 pounds of alloy at $16.00 per pound Direct labor per unit 0:04 hours at $30 per hour Overhead per unit Indirect materials Indicect labor Utilities Machine depreciation Other overhead Total overhead per unit *$ 0.40 0.80 0.60 1.10 8.60 $ 3.50 The machine depreciation and other overhead costs are fixed and are based on production of 100,000 units annually. Plant capacity is 120,000 units annually. All other overhead costs are variable. The following are forecast for year 2. A wage increase of 6 percent for both direct and indirect labor, which was negotiated recently. will go into effect. Steel prices are expected to decrease by 5 percent while alloy prices are expected to increase by 10 percent. Machine depreciation costs are expected to increase by 4 percent. All other unit overhead costs are expected to remain constant. West Partners expects to sell 84,000 units in year 2. The current inventory of fittings is 8,000 units. Management is forecasting much higher sales volume in year 3, so wants to have 11.000 units on hand by the end of year 2. Steel and alloy Inventories will not change. Sales are approximately uniform over the year. Required: a. Prepare a production budget for the coming year. b. Estimate the direct materials, direct labor, and overhead costs for the coming year.
Expert Solution
steps

Step by step

Solved in 4 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
Principles of Accounting Volume 2
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
Principles of Cost Accounting
Principles of Cost Accounting
Accounting
ISBN:
9781305087408
Author:
Edward J. Vanderbeck, Maria R. Mitchell
Publisher:
Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser…
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Managerial Accounting
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
Managerial Accounting: The Cornerstone of Busines…
Managerial Accounting: The Cornerstone of Busines…
Accounting
ISBN:
9781337115773
Author:
Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:
Cengage Learning
Financial And Managerial Accounting
Financial And Managerial Accounting
Accounting
ISBN:
9781337902663
Author:
WARREN, Carl S.
Publisher:
Cengage Learning,
SEE MORE TEXTBOOKS