Manderlee corp. manufactures two products, product a and product b. the following production data is for april of the current year. prod a prod b estimated beginning inventory (in units) 25,000 30,000 desired ending inventory (in units) 24,800 32,200 expected sales volume for april (in units) 52,000 82,000 instructions: prepare a production budget for april which provided the following (a) units to produce of prod a (b) units to produce of prod b prod a prod b

Production A 51,800

Prodiction B 84,200

Explanation:

We must add the sales and the ending inventory

which represent the total units required during the period, the nwe subtract the beginning inventory

the diference wil lbe the amount of units to produce.

(1) The total amount of product costs is $79,430.

(2) The total amount of period costs is $37,300.

Explanation:

Note: There are two requirements in this question as follows:

(1) What is the total amount of product costs?

(2) What is the total amount of period costs?

These two are answered as follows:

(1) What is the total amount of product costs?

Product cost can be described as the expenses that are incurred in order to produce a product. These types of expenses are charged to cost of goods sold and include direct materials, direct labor, factory overhead, and consumable production supplies.

Therefore, the total amount of product costs of Choco Chocolata can be calculated as follows:

Choco Chocolata

Computation of Total Product Costs

Details                                                                     Amount ($)  

Utilities for the bakery                                                  2,100

Paper used in packaging product                                  180

Salaries and wages in the bakery                            23,500

Cookie ingredients                                                    43,500

Bakery labor fringe benefits                                        1,300

Bakery equipment maintenance                                   800

Depreciation of bakery plant and equipment           2,200

Uniforms for bakers                                                        750

Insurance for the bakery                                                900

Boxes, bags, and cups used in the bakery                 1,100

Overtime premiums                                                     2,600

Idle Time                                                                          500  

Total                                                                             79,430  

Therefore, the total amount of product costs is $79,430.

(2) What is the total amount of period costs?

Period costs are costs that are related to passage of time but cannot not be charged to the cost of goods sold.

Therefore, the total amount of period costs of Choco Chocolata can be calculated as follows:

Choco Chocolata

Computation of Total Period Costs

Details                                               Amount ($)  

Administrative costs                             2,300

Rent for administration offices            18,500

Advertising                                            3,500

Office Manager's salary                      13,000  

Total                                                      37,300  

Therefore, the total amount of period costs is $37,300.