In: Accounting
Wyckam Manufacturing Inc. has provided the following information concerning its manufacturing costs:
Fixed Cost per Month |
Cost per Machine-Hour |
||||
Direct materials | $ | 5.50 | |||
Direct labor | $ | 42,900 | |||
Supplies | $ | 0.40 | |||
Utilities | $ | 2,000 | $ | 0.25 | |
Depreciation | $ | 14,900 | |||
Insurance | $ | 11,900 | |||
For example, utilities should be $2,000 per month plus $0.25 per machine-hour. The company expects to work 4,200 machine-hours in June. Note that the company’s direct labor is a fixed cost.
Required:
Prepare the company’s planning budget for June.
|
Wyckam Manufacturing Inc.
Planning Budget for Manufacturing Cost
For the Month Ended June 30
Direct
materials
$23,100
Direct
labor
$42,900
Supplies
$1,680
Utilities
$3,050
Depreciation
$14,900
Insurance
$11,900
Total manufacturing
cost
$97,530
Explanation
Direct materials - ($5.5 × 4,200) = $23,100
Supplies - ($0.40 × 4,200) = $1,680
Utilities - ($2000 + ($0.25 ×4,200)) = $3,050