# Answered Essay: Miller and Sons' static budget for 10,000 units of production includes \$43,500 for direct materials, \$45,000 for direct labor, variable utilities of

Miller and Sons’ static budget for 10,000 units of production includes \$43,500 for direct materials, \$45,000 for direct labor, variable utilities of \$6,400,middotand supervisor salaries of \$15,500. A flexible budget for 12,500 units of production would show Round your final answer to the nearest dollar. Do not round interim calculations. total variable costs of \$110,400 the same cost structure in total direct materials of \$54,375, direct labor of \$56,250, utilities of \$8,000, and supervisor salaries of \$15,500 direct materials of \$54,375, direct labor of \$56,250, utilities of \$8,000, and supervisor salaries of \$18,600

 Miller and Sons static Budget For 10,000 units For 12,500 units Direct Material \$               43,500 \$              54,375 Direct labor \$               45,000 \$              56,250 Variable utilities \$                 6,400 \$                 8,000 Supervisor salaries \$               15,500 \$              15,500

Explanation:

For 12,500 units

Direct material = (\$ 43,500/10,000) x 12500 = \$ 54,375

Direct labor = (\$ 45,500/10,000) x 12500 = \$ 56,250

Variable utilities = (\$6,400/10,000) x 12500 = \$ 8,000

Supervisor salaries will be same for both production level.

Hence option 3rd “direct material of \$ 54,375, direct labor of \$ 56,250, utilities of \$ 8,000, and Supervisor salaries of 15,500” is correct answer.

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