chapter 7 lecture notes

Chapter 7 lecture notes

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Unformatted text preview: ts to be produced Labor hours per lot Labor cost per lot Direct labor cost Total cost of direct labor 425 410 520 650 2,005 12 12 12 12 12 $15.00 $15.00 $15.00 $15.00 $15.00 $76,500 $73,800 $93,600 $117,000 $360,900 $265,500 $259,800 $345,600 $451,800 $1,322,700 Lots from Production Budget Labor hours from Production Manager Labor cost from Production and HR Managers Preparing a Master Budget – Amarillo Toys – Mfg Overhead Info Consists of both variable and fixed Variable Mfg OH (supplies, plasKc to wrap product, etc) Possible to esKmate each item separately – industry pracKce is to esKmate based on direct labor cost Has been steady at $0.50 per direct labor cost in the past Fixed Mfg OH (salaried employees, warehousing, etc) These amounts are usually large – so esKmate each separately Cash expenses for salaries, rent, property taxes - $3,800,000 Non cash expenses for equipment depreciaKon - $1,450,000 Preparing a Master Budget – Step 5 – Input Resources – Mfg OH Quarter 1 Quarter 2 Variable mfg OH BuildIT - budgeted DL cost Variable OH rate per DL $ Total variable mfg OH BuildIT- PLUS - budgeted DL cost Variable OH rate per DL $ Total variable mfg OH Fixed mfg OH Cash expenses Non- cash expense - equip depr Total fixed mfg OH Total Overhead Costs Quarter 3 Quarter 4 Total $189,000 $0.50 $94,500 $186,000 $0.50 $93,000 $252,000 $0.50 $126,000 $334,800 $0.50 $167,400 $961,800 $0.50 $480,900 $76,500 $0.50 $38,250 $73,800 $0.50 $36,900 $93,600 $0.50 $46,800 $117,000 $0.50 $58,500 $360,900 $0.50 $180,450 $950,000 $950,000 $950,000 $950,000 $950,000 $950,000 $950,000 $3,800,000 $1,450,000 $950,000 $5,250,000 $1,082,750 $1,079,900 $1,122,800 $1,175,900 $5,911,350 Direct labor cost from Labor Budget Variable OH rate and Fixed OH items from Production mgr Preparing a Master Budget – Amarillo Toys – Var Cost of Gds Mfd Info Once we have budgets for DM, DL and OH we can calculat...
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This document was uploaded on 04/01/2014.

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