Problem #$8$: Processing Costing Problem #$8$: Processing Costing

UMPI's Potatoes produces ready$-$to$-$eat mashed potatoes for resale at food stores. The master budget indicates that the company

expects to use $5$ pounds of direct materials for each unit produced at a cost of $$5$ per pound $($one unit $=$ one batch of mashed$).$ Each

unit produced will require $0\mathrm{.}40$ direct labor hours at a cost of $$7\mathrm{.}50$ per hour. Variable manufacturing overhead is applied based on

direct labor hours at a rate of $$4$ per hour. Last year's sales were expected to total $60,000$ units. Jake just received last year's actual

results showing sales of $55,000$ units.

Prepare a schedule showing the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead.

Prepare a flexible budget based on actual sales for direct materials, direct labor, and variable manufacturing overhead.

UMPI's Potatoes produces ready$-$to$-$eat mashed potatoes for resale at food stores. The master budget indicates that the company

expects to use $5$ pounds of direct materials for each unit produced at a cost of $$5$ per pound $($one unit $=$ one batch of mashed$).$ Each

unit produced will require $0\mathrm{.}40$ direct labor hours at a cost of $$7\mathrm{.}50$ per hour. Variable manufacturing overhead is applied based on

direct labor hours at a rate of $$4$ per hour. Last year's sales were expected to total $60,000$ units. Jake just received last year's actual

results showing sales of $55,000$ units.

$1)$ Prepare a schedule showing the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead.

$2)$ Prepare a flexible budget based on actual sales for direct materials, direct labor, and variable manufacturing overhead.