Question

A company has the following annual budget data: Beginning finished goods inventory 53,000units Sales 83,000units Ending finished goods inventory 43,000units Direct materials$14per unit Direct labor$25per unit Variable factory overhead$6per unit Selling costs$3per unit Fixed factory overhead$93,000 What are total budgeted production costs for the year

Answer 1

Total budgeted production costs $ 3378,000

Step-by-step explanation:

Production Units= Ending Units + sales - Beginning Units

Production units= 43000+ 83000-53000= 73000

Direct materials $14per unit *73000= $ 1022,000

Direct labor $25per unit *73000= $ 1825,000

Variable factory overhead $6per unit *73000= $ 438,000

Fixed factory overhead $93,000

Total Manufacturing Costs $ 3378,000

Total Production Costs do not include Selling costs. Production costs include costs required to convert raw material into specific products. Selling costs are related to the sale of a product.

The production costs include the costs of manufacturing , FOH, direct materials and direct labor.