Question

Answer the following questions using the information below:

Elton Inc. expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:

Beginning inventory Ending inventory
Direct materials 1,000 units 1,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 400 units 500 units

*35) What are the 2016 budgeted production costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?*
A) $12,200; $61,000; $18,300
B) $12,000; $60,000; $18,000
C) $2,000; $10,000; $3,000
D) $2,000; $0; $4,500

Answer 1

The budgeted production costs for direct materials, direct manufacturing labor, and manufacturing overhead are $12,000, $60,000, and $18,000, respectively.

Step-by-step explanation:

The budgeted production costs for direct materials, direct manufacturing labor, and manufacturing overhead can be calculated as follows:

Direct materials cost = beginning inventory + purchases - ending inventory = 1,000 + (6,000 * 2) - 1,000 = $12,000

Direct manufacturing labor cost = total number of units produced * labor cost per unit = 6,000 * 10 = $60,000

Manufacturing overhead cost = total number of units produced * overhead cost per unit = 6,000 * 3 = $18,000