Question
Daniel Inc. expects to sell 6,000 ceramic vases for $20 each in 2022. 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 2022.
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. Each vase requires one hour of direct labour, and manufacturing overhead is allocated based on direct labour hours.
The units in work-in-process beginning and ending inventory were half complete as to direct labour and manufacturing overhead costs; the units in beginning inventory are completed before new units are started.
The following inventory levels are expected to apply to 2022:
Beginning InventoryEnding InventoryDirect Materials1,000 kg800 kgWork-In-Progress Inventory100 units300 unitsFinished Goods Inventory400 units500 units
Required:
- How many ceramic vases need to be produced in 2022?
- How many kilograms of material will need to be purchased for 2022 production and inventory requirements?
- What are the 2022 budgeted costs for direct manufacturing labour?
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