Question

# Cheyenne Company is planning to produce 2,700 units of product in 2017. Each unit requires 1.60...

Cheyenne Company is planning to produce 2,700 units of product in 2017. Each unit requires 1.60 pounds of materials at \$5.40 per pound and a half-hour of labor at \$14.00 per hour. The overhead rate is 80% of direct labor. Collapse question part (a) Compute the budgeted amounts for 2017 for direct materials to be used, direct labor, and applied overhead. Direct materials \$ Direct labor \$ Overhead

1.

 Units to be produced 2,700 (x) Direct materials required per unit ( pounds ) 1.60 Total direct materials to be used ( pounds ) 4,320 (x) Rate per pound \$5.40 Budgeted amount of direct materials to be used \$23,328

2.

 Units to be produced 2,700 (x) Direct labor hour required per unit 0.5 Total direct labor hours required 1,350 (x) Rate per direct labor hour \$14 Budgeted amount of direct labor \$18,900

3. Applied overhead = 80% of direct labor cost = 80% * \$18,900 = \$15,120