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18 July, 14:05

EA15.

LO 7.4Cold X, Inc. uses this information when preparing their flexible budget: direct materials of $2 per unit, direct labor of $3 per unit, and manufacturing overhead of $1 per unit. Fixed costs are $35,000. What would be the budgeted amounts for 20,000 and 25,000 units?

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  1. 18 July, 14:22
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    Instructions are listed below.

    Explanation:

    Giving the following information:

    flexible budget:

    direct materials of $2 per unit

    direct labor of $3 per unit

    manufacturing overhead of $1 per unit.

    Fixed costs are $35,000.

    20,000 units:

    Total direct material = 2*20,000 = 40,000

    direct labor = 3*20,000 = 60,0000

    overhead = 1*20,000 = 20,000

    Total manufacturing costs = $120,000

    Fixed costs = 35,000

    Total product costs = $155,000

    25,000 units:

    Total direct material = 2*25,000 = 50,000

    direct labor = 3*25,000 = 75,0000

    overhead = 1*25,000 = 25,000

    Total manufacturing costs = $150,000

    Fixed costs = 35,000

    Total product costs = $185,000
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