Question

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	$	42,300
Supplies				$	0.30
Utilities	$	1,100		$	0.25
Depreciation	$	14,600
Insurance	$	11,500

For example, utilities should be $1,100 per month plus $0.25 per machine-hour. The company expects to work 4,400 machine-hours in June. Note that the company’s direct labor is a fixed cost.

Required:

Prepare the company’s planning budget for June.

Answer 1

Wyckam Manufacturing Inc
Planning Budget for Manufacturing Cost
For the Month Ended June 30
	$
Direct materials ($5.50 ×4,400)	24,200.00
Direct labor	42,300.00
Supplies ($0.30 ×4,400)	1,320.00
Utilities [$1,100 + ($0.25 ×4,400)]	2,200.00
Depreciation	14,600.00
Insurance	11,500.00
Total manufacturing cost	96,120.00