Question

Clicker Question Preparation Guide: Ch. 10 Clicker questions will be asked in class based on your completion of this preparation quide. Example in class question: "Question 1) What are the total manufacturing costs when 900 units are produced? You will not have time to complete this guide in class! 1. Cyber Construction's manufacturing costs for August when production was 1,000 units appear below: Direct Materials $11,000 Direct Labor $8,500 Variable Overhead $6,000 Factory Depreciation $4,000 Factory Supervisory Salaries $9,800 Other Fixed Factory Costs $1,500 Compute the flexible budget manufacturing cost amount for a month when 900 units are produced. Direct Materials Direct Labor Variable Overhead Factory Depreciation Factory Supervisory Salaries Other Fixed Factory Costs Total 2. Point, Inc. produces men's shirts. The following budgeted and actual ar punts are for 2018: Cost Direct materials Direct labor Fixed overhead Budgeted Amounts at 2,500 units Actual Amounts at 2,900 units $55,000 $65,000 $80,000 $83,000 $30,000 $34,500 Prepare a responsibility report for Point, Inc. for the year. POINT, INC. Manufacturing Performance Responsibility Report For the Year Ended December 31, 2018 Budget (2,900 units) Differences Direct Materials Direct Labor Fixed Overhead Total costs Actual $65,000 $83,000 $34,500

Answer 1

Answer to Question 1: Calculation of Fixeible Budget Manufacturing Cost when 900 units are produced: Variable Costs: Direct Materials ($11.00 * 900) 9,900 Direct Labor ($8.50 * 900) 7,650 Variable Overhead ($6.00 * 900) 5,400 Total Variable Costs 22,950 Fixed Costs: Factory Depreciation 4,000 Factory Supervisory Salaries 9,800 Other Fixed Factory Costs 1,500 Total Fixed Costs 15,300 Total 38,250 Calculation: Direct Materials Cost per Unit = $11,000 / 1,000 = $11.00 Direct Labor Cost per Unit = $8,500 / 1,000 = $8.50 Variable Overhead Cost per Unit = $6,000 / 1,000 = $6.00