Blossom, Inc. prepared the following master budget items for July: Production an
ID: 2576276 • Letter: B
Question
Blossom, Inc. prepared the following master budget items for July: Production and sales Variable manufacturing costs: 22,000 units Direct materials Direct labor Variable manufacturing overhead $ 22,000 $ 39,600 $ 44,000 $190,000 $ 295,600 Fixed manufacturing costs Total manufacturing costs During July, Blossom actually sold 28,000 units. Prepare a flexible budget for Blossom based on actual sales. (Do not round your intermediate calculations.) Production and Sales Units Variable Manufacturing Costs Direct Materials Direct Labor ariable Manufacturing Overhead Fixed Manufacturing Costs Total Manufacturing CostsExplanation / Answer
Flexible budget for blossom based on actual sales -
Production and Sales 28,000 Units
Variable Manufacturing costs
i) Direct Materials @ $1.00 per unit $ 28,000
ii) Direct Labor @ $1.80 per unit $ 50,400
iii) Variable Manufacturing overhead @ $ 2.00 per unit $ 56,000
A. Total Variable costs $ 134,400
B. Fixed Manufacturing costs $ 190,000
Total Manufacturing Costs $ 324,400
Workings -
Computation of Variable cost per unit
Total production 22,000 Units
Cost cost per unit
Direct materials $ 22,000 $ 1.00 ($22,000 / 22,000 units)
Direct Labor $ 39,600 $ 1.80 ($39,600 / 22000 units)
Variable overheads $ 44,000 $ 2.00 ($44,000 / 22000 Units)