Question

The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor: Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 2.00% 2. Labor Costs are expected to increase by 2.50%. 3. Variable Overhead is expected to increase by 2.50%. 4. Fixed Overhead is expected to increase to $260,000. 5. Fixed Administrative expenses are expected to increase to $62,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 2.00% 7. Fixed selling expenses are expected to be $41,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 6.00%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs.

Answer 1

Production Budget
Planned Sales	43000
Desired ending inventory balance	2400	=3000*80%
Total Needed	45400
Less : Beginning Inventory	3000
Total Production	42400
Materials Budget
Lamp Kits
Needed for Production	42400
Desired ending inventory balance	750
Total Needed	43150
Less : Beginning Inventory	500
Total Purchases	42650
Cost per piece	$            16.32	=16*1.02
Cost of Purchases	$ 6,96,048.00
Direct Labor Budget
Labor cost per lamp	$              2.05	=2*1.025
Production	42400
Total Labor cost	$    86,920.00
Factory Overhead Budget
Variable Factory Overhead
Per unit	$              2.05	=2*1.025
Production units	42400
Total Variable factory overhead	$    86,920.00
Fixed Factory overhead	$ 2,60,000.00
Total Factory Overhead	$ 3,46,920.00