Question

Timeless Creations, Inc. is trying to budget for the upcoming holiday season as to how many coloring books they need to make and what the manufacturing costs will be at varying units of production. Fill in the table below to complete the flexible budget for December 2017: 15 pts
Manufacturing Costs   Standard Unit Cost   Master Budget
10,000 Units   12,000 Unit   18,000 Units   20,000 Units
Direct Materials   $2   $20,000          
Direct Labor
   $1   10,000          
VOH 10% of DL Cost   0.10   1,000          
FOH $5,000 per month
   .50   $5,000          
Total Manufacturing Cost   $3.60   $36,000

Answer 1

PARTICULARS	10000 UNITS	12000 UNITS	18000 UNITS	20000 UNITS
DIRECT MATERIAL	$20000	$24000	$36000	$40000
DIRECT LABOUR	$10000	$12000	$18000	$20000
VARIABLE OVERHEAD	$1000	$1200	$1800	$2000
FIXED OVERHEAD (see note below)	$5000	$5000	$5000	$5000
TOTAL MANUFACTURING COST	$36000	$42200	$60800	$67000
TOTAL MANUFACTURING COST PER UNIT	$3.6 per unit	$3.52 per unit	$3.38 per unit	$3.35 per unit

rounded off upto 2 decimal.

NOTE: FIXED OVERHEAD- Fixed overhead are the overheads which are constant in a range of production/activity and does not fluctuate with vary in a range of activity. In this question, No range of activity specified for fixed overhead hence it is assumed that the fixed overhead will remain constant ($5000) in the range of production of 10000 units to 20000 units.