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0-50 Comprehensive Profit Plan Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2016 follow: Finished Components C12 D57
0-50 Comprehensive Profit Plan Spring Manufacturing Company makes two components identified as C12 and D57. Selected budgetary data for 2016 follow: Finished Components C12 D57 Requirements for each finished component RM 1 RM 2 RM 3 Direct labor 8 pounds 4 pounds 1 pound 3 hours 10 pounds 2 pounds 2 hours Productinformation: Sales price Sales (units Estimated beginning inventory (units) Desired ending inventory (units) $150 12,000 400 300 $220 9,000 150 200 Chapter 10 Strategy and the Master Budget 385 Direct Materials Information RM3 S 0.50 1,000 1,500 RM1 RM2 Cost per pound Estimated beginning inventory in pounds Desired ending inventory in pounds 2.00 3,000 4,000 S 2.50 1,500 1,000 The firm expects the average wage rate to be $25 per hour in 2016. Spring Manufacturing uses direct labor hours to apply overhead. Each year the firm determines the overhead application rate for the year based on the budgeted output for the year. The firm maintains negligible work-in- process inventory and expects the cost per unit for both beginning and ending finished products inventories to be identical
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