Question

26) ABT, Inc., has the following budgeted variable costs per unit produced: Direct Materials $ 0.25 Direct Labor 0.22 Variable Overhead: Supplies 0.04 Indirect Labor 0.06 Power 0.02 Budgeted fixed overhead costs per quarter include supervision of $100,000, depreciation of $200,000, and rent of $20,000. Prepare a flexible budget for all costs of production for the following levels of production: 2,400,000 units, 3,000,000 units, and 3,600,000 units. FLEXIBLE BUDGET ABT INC PER UNIT 2,400,000 3,000,000 3,600,000 come up with the VARIABLE COST PER UNIT DIRECT MATERIALS DIRECT LABOR VARIABLE OVERHEAD: SUPPLIES INDIRECT LABOR POWER TOTAL VARIABLE COSTS FIXED OVERHEAD SUPERVISION DEPRECIATION RENT TOTAL FIXED COSTS TOTAL PRODUCTION COSTS

Answer 1

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Flexible Budget ABT Inc. Cost per unit 2,400,000 (in 8) 3,000,000 3,600,000 output Variable cost Direct Material Direct labour Variable overhead:- Supplies Indirect labour Power 0.25 0.28 600,ooo 528,000 750,000 660,000 900,ooo 792,000 0.04 0.06 96,000 144,000 48.000 1,416,000 120,000 180,000 60,000 1,770,000 144,000 216,000 72.000 2,194,000 0.02 0.59 Total Variable Cost fixed ouahead :- Supervision Depreciation Rent Total fixed cost Total Production cost 100,000 1oo, ooo 100,000 2,00,000 200.000 200.000 d.o.ow Do, 000 200, ovo 500,000 500,000 500,000 $1916,000 $2,270,000 $2,624.000