Solution-Allocate cost to manufacturing overhead using

Allocate cost to manufacturing overhead using direct labour

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Reference no: EM133056049

Question - ABC Company is doing the budget for month November 2021.The following data are provided. The company manufactures tables for schools

Sales in units 12,250

Estimated overhead cost $11000

Estimated activity [DLH] 5000 hours

Targeted EI 2100 units

Beginning Inventory (production) 800 units

Hourly Rate for Direct Labour $11.20

For each table produced , they need 4 square feet of wood that cost $8.00 per square foot. The company started the month with 450 tables in stock and it has decided to keep 100 tables as ending inventory

The company uses 3.5 hours of direct labour to make one table.

ABC uses DLH as the cost driver to allocate manufacturing overhead.

At the end of production it charges 35% margin over the unit cost.

REQUIRED -

1. Make a production budget in units.

2. Prepare a budget for the raw materials needed.

3. Prepare a direct labour budget for the month.

4. Allocate cost to manufacturing overhead using direct labour hours as the activity [company uses Plant wide Predetermined Rate.

5. What is the budgeted total product cost? Calculate the unit cost.

Using the margin provided, make a sales budget for the month.

Reference no: EM133056049

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Allocate cost to manufacturing overhead using direct labour

Reference no: EM133056049

Reference no: EM133056049

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