25 Coming price A 30 Collections from customers 31 Collected in month of sale 32 Collected the following month 33 Desired finished goods inventory 34 (% of next month's unit sales) 35 Desired raw material inventory B C 36 (% of next month's production needs) 37 Raw material units needed to produce one Gizmo 38 What 39 Huh 40 Beginning inventory units & cost 41 Gizmo 42 What 43 Hub 44 Purchases 45 Paid in the month of purchase 46 Paid in the subsequent month 47 900 40% 60% 20% 25% 5 3 D E 1,400 $46.00 18,000 $4.00 10,800 $2.80 70% 30% 0.5 hours $24 per hour $12 per direct labor hr. 48 Direct labor time to produce one Gizmo 49 Cost of direct labor 50 Factory overhead 51 52 Selling and administrative expenses 53 54 Plant and equipment depreciation 55 $10,000 fixed 10% variable $12,000 per year