Question

Mama Italiano Sauce is in the process of preparing a production cost budget for May. The actual costs in April were:

Mama Italian Sauce
Production Cost Budget
April 2008
Production - Jars of sauce	20,000
Ingredient cost (variable)	$16,000
Labor cost (variable)	9,000
Rent (fixed)	4,000
Depreciation (fixed)	6,000
Other (fixed)	1,000
Total	$36,000

Using this information, prepare a budget for May stating the total amount for the May budget. Assume the budget will increase to 25,500 jars of sauce reflecting anticipated sales increase related to a new marketing campaign

Answer 1

Mama Italian Sauce
Production Cost Budget
May 2018
Production - Jars of sauce	25500
Ingredient cost (variable)	$         20,400
Labor cost (variable)	$         11,475
Rent (fixed)	$           4,000
Depreciation (fixed)	$           6,000
Other (fixed)	$           1,000
Total	$        42,875