ASF Corporation is manufacturing three types of products, namely L, M, and N, and is currently in process of reviewing the quarterly budgets for its products. Quarterly budgets for the company show that there are two different cash costs of manufacturing overhead (MOH) reported by the production head and the cost accountant for product M. Based on this information, the head of production has decided to reconsider all the available information and resubmit his budget. He has taken the following information to determine the budgeted cash cost of manufacturing overhead:
Based on your calculation, the budgeted cash cost of MOH for product M reported by the production head should be

Question

ASF Corporation is manufacturing three types of products, namely L, M, and N, and is currently in process of reviewing the quarterly budgets for its products. Quarterly budgets for the company show that there are two different cash costs of manufacturing overhead (MOH) reported by the production head and the cost accountant for product M. Based on this information, the head of production has decided to reconsider all the available information and resubmit his budget. He has taken the following information to determine the budgeted cash cost of manufacturing overhead:
 Based on your calculation, the budgeted cash cost of MOH for product M reported by the production head should be

Quizplus · Accepted Answer

Budgeted Variable Manufacturing Overhead Cost = Budgeted Number of Units to be Produced × Variable Manufacturing Overhead Cost per Unit
Budgeted Variable Manufacturing Overhead Cost = 6,700 × $4 = $26,800
Budgeted Fixed Manufacturing Overhead Cost = Depreciation Allocated to Product M + Rent Allocated to Product M
= $2,700 + $200 = $2,900
Total Budgeted Manufacturing Overhead Cost = Variable Manufacturing Overhead Cost + Fixed Manufacturing Overhead Cost
Total Budgeted Manufacturing Overhead Cost = $26,800 + $2,900 = $29,700
Total Budgeted Cash Cost of Manufacturing Overhead = Total Budgeted Manufacturing Overhead Cost F1F1F1S1?F1F1F10 Depreciation Allocated to Product M
Might consider leaving depreciation out completely as question asked for cash cost of OH
The intention to provide the depreciation information in the question is to let the student decide the depreciation treatment under the given requirement.
= $29,700 F1F1F1S1?F1F1F10 $2,700 = $27,000.

ASF Corporation Is Manufacturing Three Types of Products, Namely L