Question

Suppose Chef Kitchen manufactures cast iron skillets. One model is a​ 10-inch skillet that sells for $ 25. Chef Kitchen projects sales of 550 ​10-inch skillets per month. The production costs are $ 6 per skillet for direct​ materials, $ 5 per skillet for direct​ labor, and $ 1 per skillet for manufacturing overhead. Chef Kitchen has 65 ​10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 25​% of the next​ month's sales. Selling and administrative expenses for this product line are $ 1 comma 900 per month. Chef Kitchen is budgeted to produce 623 skillets in July. Compute the total amount budgeted for product costs for July.

Answer 1

Answer:

Total Manufacturing Cost                 7,476

Explanation:

Production  Budget     623 skillet

Direct Materials               6 x 623 =  3,738

Direct Labor                     5 x 623 =   3,115

manufacturing overhead 1 x 623 =    623

Total Manufacturing Cost                 7,476

We are given with the budgeted production, we just need to multiply each concept for the unit cost.

The adminsitrative expenses are not considered product cost.