Amherst Metal Works produces two types of metal lamps. Amherst manufactures 20,000 basic lamps and 5,000 designer lamps. Its simple costing system uses a single Indirect-cost pool and allocates costs to the two lamps on the basis of cirect manufacturing labor-hours. It provldes the following budgeted cost Information: Calculate the total budgeted costs of the basic and designer lamps using Amherst's simple costing system. Begin by Calculating the budgeted indirect cost rate for the single indirect cost pool. First select the formula, then enter the applicable amounts and calculate the rate Abbreviations used: MOH = Manufacturing Overhead Budgeted indirect manufacturing costs Budgeted manufacturing labor hours- Budgeted MOH rate per manutacturing labor-hour 234,000 13,000 S 18 Now calculate the total budgeted costs and per unit costs of the basic and designer lamps using Amherst's simple costing system. (Round all per unit amounts to two decimal places.] Basic lamps Total Per unit Direct materials Direct manufacturing labor Total direct costs Indirect costs allocated Total costs 180,000 $ 200,000 380,000 9.00 10.00 19.00

Budgeting is the act of estimating a company's future income and expenditures that goes out from paying expense over a set period of time.

Total Budgeted Costs = $ 450,000

Total Costs 515,000

SOLUTION:-

Manufacturing Overhead Budgeted 234,000

Budgeted manufacturing labor hours 13,000

Budgeted MOH rate per manufacturing labor-hour = 234,000/13,000= $ 18

Basic lamps 20,000 units

Total Budgeted Costs = 18*20,000= 360,000

                         Unit Costs                              Total Costs                                

Direct materials 9.00                                            180,000

Direct manufacturing labor 10.00                        200,000

Total Per unit 19.00                                               380,000

Total direct costs                                                   180,000

Indirect costs allocated                                         200,000

Total costs                                                            $380,000  

Designer lamps 5,000 units

Total Budgeted Costs (18*5,000)                        90,000

Unit Costs                                                           Total Costs                                  

Direct materials 15.00                                           75,000

Direct manufacturing labor 12.00                        60,000

Total Per unit 27.00                                             135,000

Total direct costs                                                  75,000

Indirect costs allocated                                      60,000

Total costs                                                            $135,000  

                                          Basic                  Designer         Total

Total Direct Materials      180,000                  75000           255,000

Direct Labor                     200,000                  60,000        260,000

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Total Budgeted Costs = $ 450,000

Total Costs 515,000

Explanation:

Manufacturing Overhead Budgeted  234,000

Budgeted manufacturing labor hours 13,000

Budgeted MOH rate per manufacturing labor-hour = 234,000/13,000= $ 18

Basic lamps 20,000 units

Total Budgeted Costs = 18*20,000= 360,000

                           Unit Costs                             Total Costs                                  

Direct materials 9.00                                           180,000

Direct manufacturing labor 10.00                       200,000

Total Per unit 19.00                                              380,000

Total direct costs 180,000

Indirect costs allocated 200,000

Total costs $  380,000  

Designer lamps 5,000 units

Total Budgeted Costs = 18*5,000= 90,000

Unit Costs                                                Total Costs                                  

Direct materials 15.00                                           75,000

Direct manufacturing labor 12.00                        60,000

Total Per unit 27.00                                              135,000

Total direct costs 75,000

Indirect costs allocated 60,000

Total costs $  135,000  

                                            Basic                  Designer         Total

Total Direct Materials      180,000                  75000           255,000

Direct Labor                     200,000                  60,000        260,000

Total Budgeted Costs = 360,000+ 90,000= $ 450,000

Total Costs =255,000+ 260,000= $ 515,000

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