28. Murqua Enterprises manufactures many products, including wooden spoons. Each spoon requires 1.5 feet of wood, costing
Question:
28. Murqua Enterprises manufactures many products, including wooden spoons. Each spoon requires 1.5 feet of wood, costing $1 per foot. An assembly worker can supervise the machine carving and sanding process of 20 spoons an hour. Assembly labor is paid $9 per hour. Variable overhead is applied at a rate of $4.50 per direct labor hour, and fixed overhead is expected to be $42,500 next year. General, selling, and administrative costs allocated to the wooden spoon product line are expected to be $65,000 next year. Murqua expects to sell 90,000 spoons next year for $3.50 per spoon. At the end of the current year, there should be 15,000 spoons in finished goods inventory worth $40,125. Ending finished goods inventory next year is expected to consist of 10,000 spoons. Raw materials inventory is expected to be 12,000 feet at the end of this year, and is expected to stay constant throughout the year.
Prepare all budgets necessary to result in a budgeted income statement for next year.
Flumber, Inc., projects the following sales in units, which sell for $130 each:
Flumber’s policy is to end each month with 10% of the following month’s sales needs in finished goods inventory, and 5% of the following month’s production needs in raw materials inventory.
March 1 finished goods inventory of 1,200 units is estimated to be worth $157,000. Each unit requires 10 pounds of raw material, which costs $2 per pound, and 4 hours of labor, which costs $10 per hour. Variable overhead is estimated to cost 80% of direct labor cost. Fixed costs are estimated to be $100,000 for manufacturing overhead and $280,000 in selling, general, and administrative costs per month.
Step by Step Answer:
Mastering Managerial Accounting Key Concepts Through Problem Sets
ISBN: 9781626611184
1st Edition
Authors: Christine Denison