Graded Homework

2–3. Minot Inc. plans to manufacture 60,000 units of Product T. Product T is produced in Department 1, where 0.40 hour per unit is required for direct labor. Direct labor rates in Department 1 are $25 per hour.

2. The hours required in Department 1 to manufacture Product T are ….

3. The total direct labor cost to manufacture Product T is ………………………

4–5. Davis Co.’s accounts receivable on January 1, 2010, total $400,000.
Budgeted sales for the first three months of the year are:

January February March

$600,000 $750,000 $800,000

Davis expects to sell 20% of its merchandise for cash. Of the
remaining 80% of the sales on account, 60% is expected to be
collected in the month of sale and the remainder in the following month.

4. Calculate Davis’ estimated cash receipts for January ……………………….

5. Calculate Davis’ estimated cash receipts for February ……………………..

6–8. Stewart Young Inc. uses a flexible budgeting system to plan for its manufacturing operations. The static budget for 20,000 units of production provides for direct labor at $12 per unit and variable electricity expense at $0.75 per unit. Fixed costs for the period are electric power $2,000 and supervisor salaries of $25,000.

6. Variable costs for 22,000 units of production are ………………………………

7. Fixed costs for 22,000 units of production are ……………………………………

8. The total department costs for 23,000 units of production are …………..