Question

Tangshang Industries production budget from the 2nd quarter of 2018, projected the following amounts of units...

Tangshang Industries production budget from the 2nd quarter of 2018, projected the following amounts of units to be produced:

April    1,000 units

May     1,200 units

June     1,250 units

Each unit requires 2 parts of component A and 3 parts of component B. Component A cost is $1.25 per unit and component B cost is $.80 per unit.

1.Calculate the Direct Material budgeted cost for May 2018

2.Calculate the Direct Material budgeted cost for the quarter April - June 2018

3.The raw materials inventory policy is 0 ending inventory, 0 beginning inventory. How much inventory of component A is required in April 2018?

Each unit requires the following labor:

2 hours in the processing department

1 hour in the assembly department

Processing department labor rate is $4/hour

Assembly department labor rate is $6/hour

Using the information from the production budget of Tangshang Industries

4.Calculate Total Direct Labor Cost in the processing department for the quarter April – June 2018.

5.Calculate Total Direct Labor Cost for June 2018.

6.Calculate Total Direct Labor Cost for the quarter April – June 2018.

Variable Factory overhead is $.60 per unit

Fixed Factory overhead is $1,000 monthly

Using the information from the production budget of Tangshang Industries

7.Calculate total variable overhead cost for May 2018

8.Calculate total variable overhead cost for the quarter April - June 2018

9.Calculate total overhead cost for the quarter April - June 2018

10.Calculate total product cost for the quarter April - June 2018

11.Calculate total product cost per unit for the quarter April - June 2018

12.If the sale price is $32.50, what will be the Gross Profit per unit?

13.If the sale price is $32.50 for the units produced during the quarter, what will be the Total Gross Profit?

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Homework Answers

Answer #1

As per policy, only four parts of a question is allowed to answer, so answering 1 - 6 :

1. the Direct Material budgeted cost for May 2018 = 1200 * (2*1.25 + 3*0.80) = 1200 * 4.90 = $5880

2. the Direct Material budgeted cost for the quarter April - June 2018 = (1000+1200+1250) * 4.90 = $16905

3.The raw materials inventory policy is 0 ending inventory, 0 beginning inventory. Component A is required in April 2018 = Opening stock + Procurement - Closing stock = 0 + (1000 units * 2 parts) - 0 = 2000 parts

4. Total Direct Labor Cost in the processing department for the quarter April – June 2018 = (1000+1200+1250) (2*4) = $27600.

5. Total Direct Labor Cost for June 2018 = 1200 * (2*4 +1*6) = $16800

6. Total Direct Labor Cost for the quarter April – June 2018 = (1000+1200+1250) (2*4+1*6) = $48300.

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