Question
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2021. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2021. Direct materials costs are $2, direct manufacturing labour is $10, and manufacturing overhead is $3 per vase. Each vase requires 0.5 kilograms (kg) of material which is all added at the start of production. The units in work-in-process beginning and ending inventory were half completed as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours. The following inventory levels are expected to apply to 2021:
Beginning inventoryEnding inventoryDirect materials1,000 kg800 kgWork-in-process inventory100 units300 unitsFinished goods inventory400 units500 units
Required:
1. On the 2021 budgeted income statement, what amount will be reported for gross margin?
2. How many ceramic vases need to be produced in 2021?
3. How many kilograms of material will need to be purchased for 2021 production and inventory requirements?
4. What are the 2021 budgeted costs for direct manufacturing labour?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started