Xuereb Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 35 skeins of wool at a cost of $6 per skein and 0.8 gallons of dye at a cost of $10 per gallon. All other materials are indirect. At the beginning of the year Xuereb has an inventory of 466,000 skeins of wool at a cost of $1,165,000 and 4,400 gallons of dye at a cost of $27,280. Target ending inventory of wool and dye is zero. Xuereb uses the FIFO inventory cost flow method. O (Click the icon to view the additional information.) There is no direct manufacturing labor cost for dyeing. Xuereb budgets 50 direct manufacturing labor-hours to weave a rug at a budgeted rate of $17 per hour. It budgets 0.2 machine-hours to dye each skein in the dyeing process. E (Click the icon to view the budgeted overhead costs.) Read the requirements Requirement 1. Prepare a direct material usage budget in both units and dollars. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. More Info Direct Material Usage Budget in Quantity and Dollars Xuereb blue rugs are very popular and demand is high, but because produce only 240,000 blue rugs per year. The budgeted selling price is $2,400 each. There are no rugs in beginning inventory. Target ending inventory of rugs is also zero. Material capacity constraints the firm will Wool Dye Total Physical Units Budget Xuereb makes rugs by hand, but uses a machine to dye the wool. Thus, overhead costs are accumulated in two cost pools-one for weaving and the other for dyeing. Weaving overhead is allocated to products based on direct manufacturing labor-hours (DMLH). Dyeing overhead is allocated to products based on machine-hours (MH). Direct materials required for Blue rugs skeins gal
Xuereb Manufacturing Company manufactures blue rugs, using wool and dye as direct materials. One rug is budgeted to use 35 skeins of wool at a cost of $6 per skein and 0.8 gallons of dye at a cost of $10 per gallon. All other materials are indirect. At the beginning of the year Xuereb has an inventory of 466,000 skeins of wool at a cost of $1,165,000 and 4,400 gallons of dye at a cost of $27,280. Target ending inventory of wool and dye is zero. Xuereb uses the FIFO inventory cost flow method. O (Click the icon to view the additional information.) There is no direct manufacturing labor cost for dyeing. Xuereb budgets 50 direct manufacturing labor-hours to weave a rug at a budgeted rate of $17 per hour. It budgets 0.2 machine-hours to dye each skein in the dyeing process. E (Click the icon to view the budgeted overhead costs.) Read the requirements Requirement 1. Prepare a direct material usage budget in both units and dollars. Begin with the physical units portion, then prepare the cost budget portion of the direct material usage budget. More Info Direct Material Usage Budget in Quantity and Dollars Xuereb blue rugs are very popular and demand is high, but because produce only 240,000 blue rugs per year. The budgeted selling price is $2,400 each. There are no rugs in beginning inventory. Target ending inventory of rugs is also zero. Material capacity constraints the firm will Wool Dye Total Physical Units Budget Xuereb makes rugs by hand, but uses a machine to dye the wool. Thus, overhead costs are accumulated in two cost pools-one for weaving and the other for dyeing. Weaving overhead is allocated to products based on direct manufacturing labor-hours (DMLH). Dyeing overhead is allocated to products based on machine-hours (MH). Direct materials required for Blue rugs skeins gal
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter9: Evaluating Variances From Standard Costs
Section: Chapter Questions
Problem 3E: Salisbury Bottle Company manufactures plastic two-liter bottles for the beverage industry. The cost...
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