Question

Answer the following questions using the information below:

Kason Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 2,000 units 2,500 units

*31) What are the 2016 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?*
A) $48,000; $96,000; $19,200
B) $44,000; $88,000; $17,600
C) $41,000; $82,000; $16,400
D) $40,000; $80,000; $16,000

Answer 1

The 2016 budgeted costs for Kason Inc. for direct materials, direct manufacturing labor, and manufacturing overhead are $40,000, $80,000, and $16,000 respectively, which corresponds to answer option D.

Step-by-step explanation:

To calculate the 2016 budgeted costs for Kason Inc., we need to consider the expected sales volume and the per unit costs of direct materials, labor, and manufacturing overhead.

Given the forecast to sell 20,000 pool cues and the per unit costs for direct materials ($2.00), direct manufacturing labor ($4.00), and manufacturing overhead ($0.80), we can determine the total budgeted costs for each component.

The budgeted cost for direct materials is 20,000 cues × $2.00 per cue = $40,000. The budgeted cost for direct manufacturing labor is 20,000 cues × $4.00 per cue = $80,000. Lastly, the budgeted cost for manufacturing overhead is 20,000 cues × $0.80 per cue = $16,000.

Therefore, the correct answer is D) $40,000; $80,000; $16,000.