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Kason, Inc
Kason, Inc., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2016:
Beginning inventory Ending inventory Direct materials 24,000 units 24,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 2,000 units 2,500 units
What are the 2016 budgeted costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
0 $40,000; $80,000; $16,000 0 $48,000; $96,000; $19,200 0 $41,000; $82,000; $16,400 0 $44,000; $88,000; $17,600
0 none of the above.
Expert Solution
Computation of Budgeted Product Costs for Direct Materials Used, Direct Manufacturing Labor and Manufacturing Overhead:
Units to be produced = Expected Sales + Ending Inventory- Opening Inventory
= 20,000+2500-2000
= 20500 units
Budgeted Product Costs for Direct Materials Used = 20500*$2 = $41,000
Budgeted Product Costs for Direct Manufacturing Labor = 20500*$4 = $82,000
Budgeted Product Costs for Manufacturing Overhead = 20500*$0.8 = $16,400.
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