Question
Managerial Accounting Project - Summer 2021 Sundazzler Designs has prepared the annual manufacturing budget for its line of specialty pergolas. It estimated annual production of
Managerial Accounting Project - Summer 2021
Sundazzler Designs has prepared the annual manufacturing budget for its line of specialty pergolas. It estimated annual production of 3,000 pergolas during 2022. Each pergola will require 54 pounds of lumber and a metal kit (attachments and decorative embellishments.). The lumber used in these pergolas costs $1.50 per pound, and the metal kits cost $170 each. Each pergola will use two kinds of labor2 hours of type I labor from people who run the cutting saws and finishing tools, and 3 hours of work from type II workers who attach the metal reinforcements and other hardware. The type I employees are paid $15 per hour, and the type II are paid $12 per hour.
Manufacturing overhead is budgeted at $340,550 for the year 2022, broken down as follows.
Variable costs | |
Indirect materials | $30,000 |
Manufacturing supplies | 40,350 |
Maintenance and utilities | 66,000 |
Total variable MOH: | 136,350 |
Fixed costs | |
Supervision | 80,000 |
Insurance | 14,400 |
Depreciation | 109,800 |
Total fixed MOH: | 204,200 |
Total | $340,550 |
Annual amounts
During the first quarter, ended March 31, 2022, 1,050 units were actually produced with the following costs.
Lumber | $87,000 |
Metal kits | 178,840 |
Type I labor | 31,500 |
Type II labor | 39,060 |
Indirect materials | 11,200 |
Manufacturing supplies | 14,150 |
Maintenance and utilities | 22,500 |
Supervision | 25,000 |
Insurance | 3,600 |
Depreciation | 27,450 |
Total | $440,300 |
quarterly amounts
Assuming that the pergola line is treated as a cost center, prepare a flexible budget report for manufacturing for the quarter ended March 31, 2022, when 1,050 units were produced. (Round all budgeted amounts to the nearest dollar.)
Sundazzler Inc. Flexible Budget Report Quarter Ended March 21, 2022 950 units 1,050 units 1,200 units Costs: Variable costs Lumber Metal kits Labor-type I Labor-type II Indirect materials Manufacturing supplies Maintenance and utilities Total variable costs Fixed costs Supervision Insurance Depreciation Total fixed costs Total costs
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