Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

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.

Annual amounts 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

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

Question:

Peak sales occur during the summer months, so management expects production to be highest in the first quarter of the year. Prepare the flexible budget for manufacturing for the quarter ended March 31, 2022, assuming that production is a) 950 units, b) 1,050 units and c) 1,200 units

Costs:
Variable costs
Lumber
Metal kits
Labortype I
Labortype II
Indirect materials
Manufacturing supplies
Maintenance and utilities
Total variable costs
Fixed costs
Supervision
Insurance
Depreciation
Total fixed costs
Total costs

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting the basis for business decisions

Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello

16th edition

0077664078, 978-0077664077, 78111048, 978-0078111044

More Books

Students also viewed these Accounting questions

Question

Make arguments for the union and for the employer.

Answered: 1 week ago