Direct material usage budget in quantity and dollars

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Direct Material Usage Budget in Quantity and Dollars For the Quarter Ending March 31, 20xx Physical units budget Direct materials required (20,000 units 10 oz.) 200,000 oz. Cost budget To be purchased this period (200,000 oz. $4 per oz.) $8,000,000 Direct materials to be used this period $8,000,000 3. Direct Manufacturing Labor Costs Budget For the Quarter Ending March 31, 20xx Output units produced 20,000 Direct manufacturing labor-hours per unit 2 Total direct manufacturing labor-hours 40,000 Hourly wage rate $15 Total direct manufacturing labor costs $600,000 4. Manufacturing Overhead Costs Budget For the Quarter Ending March 31, 20xx Machine setup overhead (400 setup-hours $80 per hour) $32,000 Operations overhead (40,000 hours $1.60 per hour) 64,000 Total manufacturing overhead costs $96,000 20,000 units 100 units per batch = 200 batches. Each batch requires 2 setup hours, so 200 batches 2 setup-hours per batch = 400 setup-hours 6-15
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5. Budgeted Unit Cost For the Quarter Ending March 31, 20xx Cost per Unit of Input Input per Unit of Output Total Direct material $ 4 10 oz. $40.00 Direct manufacturing labor 15 2 DMLH 30.00 Machine setup overhead 80 0.02 setup-hours 1 1.60 Operations overhead 1.60 2 DMLH 3.20 Total cost per gizmo $74.80 1 Setup-hours per gizmo = 400 setup-hours ÷ 20,000 gizmos = 0.02 setup-hours per gizmo. Alternatively, Budgeted Unit Cost For the Quarter Ending March 31, 20xx Total (1) Per unit (2) = (1) ÷ 20,000 Direct material costs (requirement 2) $ 800,000 $40.00 Direct manufacturing labor costs (requirement 3) 600,000 30.00 Machine setup overhead costs (requirement 4) 32,000 1.60 Operations overhead costs (requirement 4) 64,000 3.20 Total costs $1,496,000 $74.80 6. Cost of Goods Sold Budget For the Quarter Ending March 31, 20xx Total Beginning finished goods inventory, Jan. 1 $ 72,000 Direct materials used $800,000 Direct manufacturing labor 600,000 Manufacturing overhead 96,000 Cost of goods manufactured 1,496,000 Cost of goods available for sale 1,568,000 Deduct: Ending finished goods inventory, Mar. 31 1 72,000 Cost of goods sold $1,496,000 1 Under LIFO cost flow assumption, the 1,000 gizmos in beginning finished goods inventory that remain in inventory on March 31 continue to be valued at $72,000. 6-16
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7. Budgeted Gross Margin For the Quarter Ending March 31, 20xx Revenues $2,400,000 Cost of goods sold 1,496,000 Gross margin $ 904,000 8. 1 st Quarter Quantity (1) Proposed Decrease (2) 2d Quarter Revised Quantity (3) = (1)×(100% ─ (2)) 3 rd Quarter Revised Quantity (4) = (3)×(100% ─ (2 Direct material 10 oz 1% 9.9 oz. 9.8 oz. Direct manufacturing labor 2 DMLH 1% 1.98 DMLH 1.96 DMLH Machine setup overhead 0.02 setup-hours 3% 0.0194 setup-hours 0.01882 setup-hours Operations overhead 2 DMLH 1% 1.98 DMLH 1.96 DMLH Budgeted Unit Cost For the Quarters Ending June 30 and Sept. 30, 20xx Cost per Unit of Input 2d Quarter Input per Unit of Output Budgeted Unit Cost June 30 3 rd Quarter Input per Unit of Output Budgeted Unit Cost Sept. 30 Direct material $ 4 9.9 oz. $39.60 9.80 oz $39.20 Direct manufacturing labor 15 1.98 DMLH 29.70 1.96 DMLH 29.40 Machine setup overhead 80 0.0194 setup hrs. 1.55 0.0188 setup-hr 1.50 Operations overhead 1.60 1.98 DMLH 3.17 1.96 DMLH 3.14 Total $74.02 $73.24 Budgeted Gross Margin For the Quarters Ending June 30, 20xx Sept. 30, 20xx Revenues $2,400,000 $2,400,000 Cost of goods sold ($74.02; $73.24 × 20,000) 1,480,400 1,464,800 Gross margin $ 919,600 $ 935,200 9. Reduction in materials can be accomplished by reducing waste and scrap.
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  • Winter '10
  • LAWWINGKIN
  • Accounting, Finished Goods, Direct manufacturing Labor

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