Chillax produces stress beanie balls. Production costs for the beanies are detailed below. Materials: each beanie needs
Question:
Chillax produces stress beanie balls. Production costs for the beanies are detailed below.
Materials: each beanie needs .8 yards of fabric and two pounds of stuffing. Fabric is budgeted to cost $15 per yard and stuffing $4 per pound.
Direct labor is paid at $18 per hour. Each beanie takes 40 minutes to hand-finish.
Variable overhead is $21 per direct labor hour.
Fixed overhead amounts to $25,000 per month.
Required:
1.Prepare a case analysis that includes preparation of the expected production costs for March when the production target is 650 beanies.
[i.e., What is the production budget [total costs to budget] for the month of March?
2.If the actual output for February was 630 beanies and actual production costs totaled $54,280, how would you evaluate the month’s performance? Include a flexible budget to support your evaluation.
Expert Answer:
Case Analysis Expected Production Costs for March Production Target 650 beanies Materials Costs Fabric 650 beanies 8 yardsbeanie 15yard 7800 Stuffing ... View the full answer
