Lulu Lemon Pants is planning on producing 40,000 pants in the year. Each pant requires 0.60 metres of material at $4 per metre and 0.15 hour of direct labour at $18 per hour. Overhead is applied at the rate of $8 per direct labour hour.
Calculate the following budgeted costs:
a) Total metres of direct materials required to produce 40,000 pants: Answer metres
b) Total direct material cost to produce 40,000 pants: $ Answer
c) Total direct labour hours required to produce 40,000 pants: Answer hours
d) Total direct labour cost to produce 40,000 pants: $ Answer
e) Total manufacturing overhead cost applied in the production of 40,000 pants: $ Answer
Now calculate the following standard costs per pants (per unit):
f) Direct material cost per t-shirt: $ Answer per pants
g) Direct labour cost per t-shirt: $ Answer per pants
h) Manufacturing overhead cost per t-shirt: $ Answer per pants
i) Standard cost of one unit of product: $ Answer per pants
a) total meters of direct materials required to produce 40,000 pants (40,000 pants*0.60 meters) | 24,000 meters |
b) total direct material cost to produce 40,000 units (24,000 meters*$4 per metre) | $96,000 |
c)total direct labour hours required to produce 40,000 pants (40,000*0.15 per hour) | 6,000 hours |
d) total direct labour cost to produce 40,000 pants (6,000 hours*$18) | $108,000 |
e)total manufacturing overhead cost applied in production of 40,000 pants (6,000 hours*$8) | $48,000 |
f) direct material cost per pant ($96,000/40,000) | $2.40 |
g)direct labour cost per pant ($108,000/40,000) | $2.70 |
h)manufacturing overhead cost per pant ($48,000/40,000) | $1.20 |
i)standard cost of one unit of product ($2.40+2.70+1.20) | $6.30 |
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