Activity-Based Budget
Macon Industries has the following budget information available for
February:
| Units manufactured | 30,000 | |
| Factory administration | $60,000 | |
| Assembly | 0.5 | hour per unit X $12 |
| Direct materials | 2 | pounds per unit X $7 |
| Inspection | $600 | per batch of 1,000 units |
| Manufacturing overhead | $7 | per unit |
| Product development | $20,000 | |
| Setup cost | $14 | per batch of 1,000 units |
Use activity based costing to prepare a manufacturing cost budget
for February. Clearly distinguish between unit, batch, and
facility-level costs.
| Macon Industries Activity-Based Manufacturing Cost Budget For the Month of February |
||
|---|---|---|
| Unit-level costs: | ||
| Direct materials | ||
| Assembly | ||
| Factory administrationInspectionManufacturing overheadProduct development | ||
| Batch-level costs: | ||
| Setup | ||
| Factory administrationInspectionManufacturing overheadProduct development | ||
| Product-level costs: | ||
| Factory administrationInspectionManufacturing overheadProduct development | ||
| Facility-level costs: | ||
| Factory administrationInspectionManufacturing overheadProduct development | ||
| Budgeted manufacturing costs | ||
Answer-
| MACON INDUSTRIES | ||
| ACTIVITY-BASED MANUFACTURING COST BUDGET | ||
| FOR THE MONTH OF FEBRUARY | ||
| PARTICULARS | AMOUNT | |
| $ | ||
| Unit-level costs:- | ||
| Direct materials | (30000 units*2 pounds per unit)*$7 per pound | 420000 |
| Assembly | (30000 units*0.5 hours per unit)*$12 per pound | 180000 |
| Manufacturing overhead | 30000 units*$7 per unit | 210000 |
| Batch-level costs:- | ||
| Set up | (30000 units/1000 units)*$14 per batch | 420 |
| Inspection | (30000 units/1000 units)*$600 per batch | 18000 |
| Product-level costs:- | ||
| Product development | 20000 | |
| Facility-level costs:- | ||
| Factory administration | 60000 | |
| Budgeted manufacturing costs | $908420 |
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