Bromley Company manufactures two products, Widget and Gizmo, in a single plant

| September 6, 2016

Question
#1 Bromley Company manufactures two products, Widget and Gizmo, in a single plant. Current year’s budgeted production is 150,000 widgets and 250,000 Gizmos. Direct manufacturing cost per unit is:

Widget Gizmo

Direct Labor $11 $14

Direct Materials $10 $12

At the budgeted level of production, indirect manufacturing cost is expected to be $20,000,000:

Widget Gizmo Total Cost

Setups 60 80 140 $4,200,000

Machine Hours 2,000 3,500 5,500 $11,000,000

Mat’l Handling* $4,800,000

*allocated budget based on direct material cost

What is the budgeted unit cost of each product at the budgeted level of production?

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