A company has the following annual budget data: What are total budgeted production costs for the year? (CIA adapted)

Question

A company has the following annual budget data:  What are total budgeted production costs for the year? (CIA adapted)

Quizplus · Accepted Answer

The budgeted total manufacturing costs are $3,500,000 (direct materials $1,000,000 plus direct labor $1,500,000 plus manufacturing overhead $1,000,000). The budgeted total non-manufacturing costs are $320,000 (general and administrative expenses $200,000 plus selling expenses $120,000). Therefore, the total budgeted costs for the year are $3,820,000. However, the question asks for only the budgeted production costs, which excludes non-manufacturing costs. Therefore, the total budgeted production costs for the year are $3,500,000.

A Company Has the Following Annual Budget Data: What