Question
Ikon Equipment produces exercise equipment. The following schedule reveals anticipated monthly production of bicycles for the first three months of the year: January 12,000 February
Ikon Equipment produces exercise equipment. The following schedule reveals anticipated monthly
production of bicycles for the first three months of the year:
January 12,000
February 15,000
March 13,000
Ikon budgets for 4 direct labor hours per bicycle, at an average cost of $17.00 per hour. Variable factory overhead is applied at the rate of $11.00 per direct labor hour. Fixed overhead is expected to run $120,000 per month, which includes $11,000 per month of noncash expenses related to depreciation.
Determine the total expected monthly cash outflow for labor and overhead.
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