Budget for 2011 Actual Results for 2011
Direct material costs 2,000,000 1,900,000
Direct manufacturin labor costs 1,500,000 1,450,000
Manufacturing overhead costs 2,700,000 2,755,000
Budgeted manufacturing overhead costs $ 4,200,000
Budgeted machine-hours 175,000
Actual manufacturing overhead costs $ 4,050,000
Actual machine-hours 170,000
Machining Department Assembly Department
Manufacturing overhead $ 1,800,000 $ 3,600,000
Direct manufacturing labor costs $ 1,400,000 $ 2,000,000
Direct manufacturing labor hours 100,000 200,000
Machine-hours 50,000 200,000
Machining Department Assembly Department
Manufacturing overhead $ 45,000 $ 70,000
Direct manufacturing labor costs $ 14,000 $ 15,000
Direct manufacturing labor hours 1,000 1,500
Machine-hours 2,000 1,000
Direct materials and supplies purchased on credit
Direct materials used
Indirect materials issued to various production departments
Direct manufacturing labor
Indirect manufacturing labor incurred by various production departments
Depreciation on building and manufacturing equipment
Miscellaneous manufacturing overhead incurred by various production departments
(ordinarily would be detailed as repairs, photocopying, utilities, etc.)
Manufacturing overhead allocated at 160% of direct manufacturing labor costs
Cost of goods manufactured
Revenues
Cost of goods sold (Before adjustment for under - or overallocated manufacturing overhead)
Inventories, December 31, 2010 (not 2011)
Materials Control 100
Work in Process 60
Finished Goods Control 500
800
710
100
1,300
900
400
550
?
4,120
8,000
4,020
Costs incurred:
Purchases of direct materials (net) on credit 124,000
Direct manufacturing labor cost 80,000
Indirect labor 54,500
Depreciation, factory equipment 30,000
Depreciation, office equipment 7,000
Maintenance, factory equipment 20,000
Miscellaneous factory overhead 9,500
Rent,factory building 70,000
Advertising expense 90,000
Sales commissions 30,000
Inventories:
1/1/2011 12/31/2011
DM 9,000 11,000
WIP 6,000 21,000
FG 69,000 24,000
Materials Control, beginning balance, January 1, 2011 12
Work-In-Process Control, beginning balance, January 1, 2011 2
Finished Goods Control, beginning balance, January 1, 2011 6
Materials and supplies purchased on credit 150
Direct materials used 145
Indirect materials (supplies) issued to various production departments 10
Direct manufacturing labor 90
Indirect manufacturing labor incurred by various production departments 30
Depreciation on plant and manufacturing equipment 19
Miscellaneous manufacturing overhead incurred (ordinarily would be detailed 9
as repairs, utilities, etc., with a corresponding credit to various liability accounts)
Manufacturing overhead allocated 2,100,000 actual machine hours ?
Cost of goods manufactured 294
Revenues 400
Cost of goods sold 292
Budgeted manufacturing overhead cost $ 125,000
Budgeted direct manufacturing labor cost $ 250,000
Actual manufacturing overhead cost $ 117,000
Actual direct manufacturing labor cost $ 228,000
Inventory balances on December 31, 2011, were as follows:
2011 Direct
Ending
Account Manufacturing labor cost
Balance
in ending balance
Work in process 50,700 20,520
Finished goods 245,050 59,280
Cost of goods sold 549,250 148,200
Machining Department Finishing Department
Manufacturing overhead costs $ 10,660,000 $ 7,372,000
Direct manufacturing labor costs $ 940,000 $ 3,800,000
Direct manufacturing labor hours 36,000 145,000
Machine-hours 205,000 32,000
Machining Department Finishing Department
Direct materials used $ 15,500 $ 5,000
Direct manufacturing labor costs $ 400 $ 1,100
Direct manufacturing labor hours 50 50
Machine-hours 130 20
Machining Department Finishing Department
Manufacturing overhead incurred $ 11,070,000 $ 8,236,000
Direct manufacturing labor costs $ 1,000,000 $ 4,400,000
Machine-hours 210,000 31,000
Professional Partner Labor
Number of professionals 5
Hours of billable time per professional 1,600
Total compensation per professional $ 200,000
Budgeted Information for 2011 relating to the two indirect-cost categories is as follows
General support
Total costs $ 1,800,000
Cost-allocation base Professional labor-hours
Richardon, Inc Punch, Inc
Professional Partners 60 30
Professional Associates 40 120
Professional Associate Labor
20
1,600 per year
$ 80,000
gories is as follows
Secretarial support
$ 400,000
Partner labor hours
hours
hours
Budgeted manufacturing overhead costs 4,800,000
Overhead allocation base Machine-hours
Budgeted machine-hours 80,000
Manufacturing overhead costs incurred 4,900,000
Actual machine-hours 75,000
Actual Machine hours 2011 end of year Balance
COGS 60,000 8,000,000
FG Control 11,000 1,250,000
WIP Control 4,000 750,000
WIP FG COGS
Balance before proration $ 27,720 $ 15,523.2 $ 115,156.8
Molding Department Overhead Allocated $ 4,602 $ 957 $ 12,489
Painting Department Overhead Allocated $ 2,306 $ 1,897 $ 24,982
Direct Materials Control Work in Process Control
1/1/2011 30,000 380,000 1/1/2011 20,000
400,000
360,000
COGS Man. Over. Control Man. Over. Allocated
540,000
Finished Goods Con.
1/1/2011 10,000 900,000
940,000
Man. Over. Allocated
Beginning Balance 12/01 Ending Balanace 12/30
Materials Control 1,200 7,600
Work-In-Process Control 5,800 8,100
Manufacturing Department Overhead Control - 94,070
Finished Goods Control 3,500 18,500
Budgeted direct labor costs $ 150,000
Budgeted overhead costs $ 180,000
Costs of actual material used $ 126,500
Actual direct labor costs $ 148,750
Actual overhead costs $ 176,000
There were two jobs in process on December 31, 2010: Job 11 and Job 12. Costs added to each Job as of
December 31 are as follows:
Direct Materials Direct Labor
Job 11 $ 3,620 $ 4,500
Job 12 $ 6,830 $ 7,250
o each Job as of
