Question

KenCor Pizza Emporium produces frozen pizzas for sale to grocery stores. The company has built a strong reputation for high-quality pizzas and has been profitable for a number of years. Because of increasing costs they are trying to control costs in the future. The CEO has asked the accounting and marketing departments to provide data related to labor costs and manufacturing overhead. Production budgets for the period ending December 31, 2009, are as follows:


Each pizza requires ½ hour of direct labor to produce. The company currently applies manufacturing overhead to production at the rate of $2.50 per direct labor hour.

Required
A. Prepare a direct labor budget for the year. Direct labor averages $12 per hour.
B. Prepare a manufacturing overhead budget for the sameperiod.


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  • CreatedMarch 11, 2015
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