Visaudiotech plans to sell 71,500 4TD remote controls in the year 2020/2021 at $150 each. The sales budget for 2020/2021 includes the sale of 44,000 SHTL remote controls at $325 each. No behinning or ending inventory budgeted for the year.

Budgeted direct materials costs are $12,826,000 in total, for production of the two types of remote control with $6,534,000 being the total budgeted cost for SHTL direct materials. Direct labour is budgeted at $15.40 per direct labour hour (DLH). The company expects to use 4 DLH and 1.5 machine hours (MH) each SHTL remote control and 1.5 DLH and 0.5 MH for each 4TD remote control produced. VisAudioTech applies a materials handling charge at 10% of dorect materials cost, which is not included in variable factory overhead. Variable manufacturing overhead is applied on the basis of direct labour hours. For 2020/2021 the budgeted variable manufacturing overhead rate is $4.75/DLH. In addition, machine related overhead is applied on the basis of MH and is budgeted at $20.50/MH.

Question:

Based on VisAudioTech's current traditional costing system, as outlined in the case, calculate the total and unit cost expected for the 4TD and the SHTL remote controls.

 
 
 
 

 

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VisAudioTech Corporation commenced operations thirty years ago in the competitive entertainment technology industry, producing custom made remote controls for videos. A few years ago, VisAudioTech began manufacturing several different types of remote controls and now two of these, account for the majority of the company's sales. This case focuses on these two types of remote controls: the simple universal remote control for digital 4K television and 4K DVD player (4TD) and the deluxe universal remote control for surround home theatre and room lighting (SHTL). The 4TD remote control has been the more common product in the industry for several years. The market for this remote control is quite competitive and price sensitive. VisAudioTech plans to sell 71,500 4TD remote controls in the 2020/2021 year at $150 each. The SHTL remote control is a recent addition to the Company's product line. This remote control is different to the 4TD namely, it incorporates technology that is more sophisticated and the materials used in its production are different to those used for 4TD remote control. As such, management has decided to sell SHTL remote control at a premium price. The sales budget for 2020/2021 includes the sale of 44,000 SHTL remote controls at $325 each. In addition, there is no beginning or ending inventory budgeted for the year. The management team at VisAudioTech usually meet to discuss key issues affecting the company. Since the company's profitability over the VisAudioTech Corporation commenced operations thirty years ago in the competitive entertainment technology industry, producing custom made remote controls for videos. A few years ago, VisAudioTech began manufacturing several different types of remote controls and now two of these, account for the majority of the company's sales. This case focuses on these two types of remote controls: the simple universal remote control for digital 4K television and 4K DVD player (4TD) and the deluxe universal remote control for surround home theatre and room lighting (SHTL). The 4TD remote control has been the more common product in the industry for several years. The market for this remote control is quite competitive and price sensitive. VisAudioTech plans to sell 71,500 4TD remote controls in the 2020/2021 year at $150 each. The SHTL remote control is a recent addition to the Company's product line. This remote control is different to the 4TD namely, it incorporates technology that is more sophisticated and the materials used in its production are different to those used for 4TD remote control. As such, management has decided to sell SHTL remote control at a premium price. The sales budget for 2020/2021 includes the sale of 44,000 SHTL remote controls at $325 each. In addition, there is no beginning or ending inventory budgeted for the year. The management team at VisAudioTech usually meet to discuss key issues affecting the company. Since the company's profitability over the

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