Question

Suppose Steel Handles manufactures cast iron skillets. One model is a 10-inch skillet that sells for $24 Steel Handles project sales of 725 10 inch skies per month The production costs are 58 per skillet for direct materials 33 per sklet for direct labor and 51 per sket for manufacturing overhead Stel Hands has 70 10 inch e s in inventory at the beginning of July but wants to have an ending Inventory equal to 40% of the next month's sales. Selling and administrative expenses for this product line are $1.200 per month Steel Handles is budgeted to produce 945 skiets in July Compute the total amount budgeted for product costs for JulyW OA. 58700 OB. 512,180 OC: 511,935 OD. 511,340

Answer 1

The Answer for above question is

Product costs refers to the cost incurred to manufacture a product.It includes Direct Materials,Direct labour ,and Manufacturing overheads.

The answer for the question is (D) i.e. ($) 11,340

Calculation of total amount budgeted for Product costs for July. Unik Particulars 725 units Forcasted sales units 290 units (+) Ending Inventory [ 40% of nextmont sales] Cic. 725 xuo %) 70 units (-) Begining Inventory 945 units units to be manufactured of Period cost calculation Particulars Amount ($) Direct materials Direct labour Manufacturing Oderhead Total Product Cost Now Total Amount of Budgeted Product costs for July = aus units X 12 ($) - 11340 ($)