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Elton, Inc
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct manufacturing labor is $10, and manufacturing overhead is $3 per vase. The following inventory levels apply to 2016:
Beginning inventory Ending inventory Direct materials 1,000 units 1,000 units Work-in-process inventory 0 units 0 units Finished goods inventory 400 units 500 units
What are the 2016 budgeted production costs for direct materials, direct manufacturing labor, and manufacturing overhead, respectively?
0 $12,200; $61,000; $18,300 0 $2,000; $0; $4,500 0 $2,000; $10,000; $3,000 0 $12,000; $60,000; $18,000 0 none of the above.
Expert Solution
Computation of 2016 Budgeted Costs for Direct Materials, Direct Manufacturing Labor and Manufacturing Overhead:
Budgeted Costs for Direct Materials:
Budgeted costs for direct materials= 6,100*$2 = $12,200
Budgeted Costs for Direct Manufacturing Labor:
Budgeted costs for direct manufacturing labor =6,100*$10 = $61,000
Budgeted Costs for Manufacturing Overhead:
Budgeted costs for manufacturing overhead= 6,100*$3 = $18,300
Workings:
Production of 2016 = Desired sales + Ending inventory - Beginning inventory
= 6000 + 500 - 400
= 6,100 Vases
So, the correct option is 1st "$12,200; $61,000; $18,300".
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