Question

Crane Company expects to produce 6,500 units of product 10 A during the current year. Budgeted variable manufacturing costs per unit are direct materials $7, direct labour $13, and overhead $19. Monthly budgeted foxed manufacturing overhead costs are $8,200 for depreciation and $3,500 for supervision. In the current month, Crane produced 7.000 units and incurred the following costs: direct materials $45.773, direct labour $86.200, variable overhead $144,495, depreciation $8,200, and supervision $3,717. Prepare a static budget report.

Answer 1

Expected production for the year: 6,500 units

Variable manufacturing costs per unit: Direct materials $7, direct labor $13, and overhead $19

Monthly fixed manufacturing overhead costs: Depreciation $8,200 and Supervision $3,500

Actual production in the current month: 7,000 units

Actual costs incurred: Direct materials $45,773, direct labor $86,200, variable overhead $144,495, depreciation $8,200, and supervision $3,717

Static Budget Report:

Budgeted Production and Sales:

Expected production for the year: 6,500 units

Actual production in the current month: 7,000 units

Budgeted Costs:

a. Variable Manufacturing Costs:

Direct materials: Budgeted per unit cost * Actual production in the current month

Direct materials: $7 * 7,000 units = $49,000

Direct labor: Budgeted per unit cost * Actual production in the current month

Direct labor: $13 * 7,000 units = $91,000

Overhead: Budgeted per unit cost * Actual production in the current month

Overhead: $19 * 7,000 units = $133,000