5-1. 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 direct manufacturing labor-hours. It provides the following budgeted cost information: Basic Lamps Designer Lamps Total Direct materials per lamp $ 9 $15 Direct manufacturing labor per lamp 0.5 hours 0.6 hours Direct manufacturing labor rate per hour $20 $20 Indirect manufacturing costs $234,000 Calculate the total budgeted costs of the basic and designer lamps using Amherst’s simple costing system.
5-1. 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 direct manufacturing labor-hours. It provides the following budgeted cost information: Basic Lamps Designer Lamps Total Direct materials per lamp $ 9 $15 Direct manufacturing labor per lamp 0.5 hours 0.6 hours Direct manufacturing labor rate per hour $20 $20 Indirect manufacturing costs $234,000 Calculate the total budgeted costs of the basic and designer lamps using Amherst’s simple costing system.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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5-1. 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 direct manufacturing labor-hours. It provides the following budgeted cost information:
Basic Lamps Designer Lamps Total
Direct materials per lamp $ 9 $15
Direct manufacturing labor per lamp 0.5 hours 0.6 hours
Direct manufacturing labor rate per hour $20 $20
Indirect
Calculate the total budgeted costs of the basic and designer lamps using Amherst’s
simple costing system.
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