Question

Brief Exercise 10-4 Gundy Company expects to produce 1,251,600 units of Product XX in 2020. Monthly production is expected to range from 79,000 to 117,000 units. Budgeted variable manufacturing costs per unit are direct materials $5, direct labor $7, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $1. Prepare a flexible manufacturing budget for the relevant range value using 19,000 unit increments. (List variable costs before fixed costs.) GUNDY COMPANY Monthly Flexible Manufacturing Budget For the Year 2020

Answer 1

Monthly Flexible Manufacturing Budget
For the year 2020
Activity level
Finished units	79000	98000	117000
Variable costs:
Direct materials	395000	490000	585000
Direct labor	553000	686000	819000
Overhead	869000	1078000	1287000
Total Variable costs	1817000	2254000	2691000
Fixed costs:
Depreciation	625800	625800	625800
Supervision	104300	104300	104300
Total Fixed costs	730100	730100	730100
Total costs	2547100	2984100	3421100
Workings:
Fixed costs:
Depreciation	625800	=(1251600*6)/12
Supervision	104300	=(1251600*1)/12