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Kennewick Manufacturing Company expects a 15% increase over the 200,000 units of product VIP sold last year and a 20% increase in the 160,000 units of product ZUM sold. VIP and ZUM are herbal supplements. Budgeted raw materials and finished goods inventories for the year were as follows:

Raw materials Beginning Ending

X 41,400 lbs. 39,800 lbs.
Y 46,000 gal. 49,000 gal.

Finished goods

VIP 19,400 units 18,000 units
ZUM 15,000 units 16,500 units

Materials and labor required in production:

For one unit VIP -- 2 lbs. of X, 2 gal. of Y
direct labor 2 hours at $6 per hour
For one unit ZUM -- 3 lbs. of X, 2 gal. of Y
direct labor 3 hours at $6 per hour

Factory overhead is applied at the rate of $4 per hour of labor used

Budgeted casts of raw materials:

X -- $1.50 per lb.
Y -- $2.25 per gal.

Selling price of VIP is $60 and SUM is $75

Prepare the following:A direct labor cost budget.Determine the production cost budgeted per unit of VIP and ZUM.

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9975508

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