Question

Bobble, Inc.’s principal product is a stainless steel water bottle that carries a lifetime guarantee. Cost and production data for the water bottle follow.
Direct materials:
Stainless steel: 0.25 kilogram per bottle at $8.00 per kilogram
Clip for the handle: 1 per bottle at $0.10 each
Direct labor:
Stamping operation: $30 per labor hour; 2 minutes per bottle
Overhead:
Stamping operation: rate equals 80 percent of department’s direct labor dollars In January, February, and March, Waterworks expects to produce 200,000, 225,000, and 150,000 bottles, respectively. The company has no beginning or ending balances of direct materials inventory or work in process inventory for the year.

Required
1. For the three-month period ending March 31, prepare monthly production cost information for the metal water bottle. Classify the costs as direct materials, direct labor, or overhead, and show your computations. (Round to the nearest dollar.)
2. Prepare a cost of goods manufactured budget for the water bottle. Show monthly cost data and combined totals for the quarter for each cost category.



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  • CreatedMarch 26, 2014
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