Question

Chapter 22 Managerial Analysis Discussion Post Group/section restrictions. Must post first Available on Sunday, October 27, 2019 1200 AM EDT An Internet gourmet foods company, "Yumminess", will be including "Chocolate Attack Brownies (CAB) in their online catalog. CAB will be sold in square tins and captioned with personal greetings. Jordan negotiated a selling price to Yumminess at $10 per tin. You, using your accounting knowledge, had previously budgeted a cost of $8 per tin, which includes $6 of direct material and $1.50 of direct labor. Annual manufacturing overhead is estimated at $100,000 for the expected sales of 200,000 tins. Operating expenses are projected to be $80,000 annually. After looking over the costs for manufacturing overhead and operating expenses, you approximate that 85 % of manufacturing overhead and 20% of operating expenses are variable costs. Jordan wants you to calculate a flexible manufacturing overhead budget assuming an annual level 230,000 units instead of 200,000.

Answer 1

Answer 1

Total variable manufacturing overheads = $ 97,750

Answer 2

Total fixed manufacturing overheads = $ 15,000

Answer 3

Total variable manufacturing overheads = $ 8,500

Answer 4

Total fixed manufacturing overheads = $ 15,000

Answer 5

Total manufacturing overheads = $ 104,250

Working Note

B 1 Units 200,000 2 Total Manufacturing Overheads $100,000 3 Variable $ 85,000 4. Fixed $ 15,000 C 230,000 $112,750 $ 97,750 $ 15,000 D 20,000 $23,500 $ 8,500 $15,000 E 210,000 $ 104,250 $ 89,250 $ 15,000

Formulae

A B C D E 1 Units 200000 230000 20000 210000 2 Total Manufacturing Overheads 100000 =C4+C3 =D4+D3 =E4+E3 3 Variable =B2*0.85 =B3/B1*C1 =C3/c1*D1 =D3/D1*E1 4. Fixed =B2*0.15 15000 15000 15000

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