Question

Lulu Lemon Pants is planning on producing 40,000 pants in the year. Each pant requires 0.60...

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

Homework Answers

Answer #1
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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