Question

Pulam, Inc. prepared the following master budget items for July:

Production and sales 36,000 units
Variable manufacturing costs:
Direct materials $ 36,000
Direct labor $ 72,000
Variable manufacturing overhead $ 72,000
Fixed manufacturing costs $ 180,000
Total manufacturing costs $ 360,000
During July, Pulam actually sold 42,000 units. Prepare a flexible budget for Pulam based on actual sales.(Do not round your intermediate calculations).

Production and sales units
Variable manufacturing costs:
Direct materials $
Direct labor $
Variable manufacturing overhead $
Fixed manufacturing costs $
Total manufacturing costs $

Answer 1

During July, Pulam actually sold 42,000 units.

Variable Manufacturing Costs for 42,000 units are-

1. Direct Material :
`(36000/36000)*42000 =42000` dollars

2. Direct Labor:
`(72000/36000)*42000 =84000` dollars

3. Variable Manufacturing Overhead :
`(72000/36000)*42000 =84000` dollars

4. Fixed manufacturing costs : $ 180000

5. Total manufacturing costs :
`42000+84000+84000+180000=390000` dollars