Question

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 1

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