Apex Company manufactures and sells executive writing desks. The following information gathered by the companys accountant is for the 2017 budget:

The company expects to sell 1,000 executive writing desks during 2017 at an estimated price of $450 per desk.

Materials and labor per desk:

Direct materials (wood) 5 board feet (b.f) per desk

Direct manufacturing labor 6 hours per desk

Costs: 2016 Unit price 2017 Unit Price

Wood $28 per b.f. $30.00 per b.f.

Direct manufacturing labor $24.00 per hour $25.00 per hour

inventories:

Beginning inventory 01/01/2017 finished goods 100units/ direct material (executive writing desk) 2,000b.f Ending inventory 12/01/2017 finished goods 200 units, direct material(wood) 1,500 b.f

Other costs:

Budgeted variable manufacturing overhead:

Indirect manufacturing labor $28,000

Indirect materials 13,200

Utilities 5,000

Budgeted fixed manufacturing overhead: Depreciation factory equipment 5,060

Factory rent 12,000

Factory managers salary 30,000

Factory security 13,000

Apex uses direct manufacturing labor-hours as the cost allocation base (denominator level) to allocate variable and fixed manufacturing costs to production.

Budgeted variable marketing expense is 30 sales visits at $250 per visit.

Budgeted fixed non-manufacturing costs are:

Selling expense, $17,000

Administrative expense, 13,000

The company plans to declare a common stock cash dividend of $5,000 in December 2017.

The inventoriable unit cost for ending finished goods inventory on December 31, 2016, is $375. The company uses FIFO inventory method for both direct materials and finished goods.

Budgeted balances at December 31, 2017, in the selected accounts are: Cash $10,000 Accounts receivable 36,000 Factory equipment (net) . 750,000 Office furniture and fixtures (net)... 300,000 Accounts payable 10,000 Note payable (due 02/01/2018) 7,000 Accumulated depreciation factory equipment 150,000 Accumulated depreciation office furniture and fixtures. 50,000 Allowance for doubtful accounts 1,740 Note payable (due 09/30/2020) .. 78,000 Bonds payable (maturing 12/31/2030) .. 100,000 Common stock ($1 par value) 100,000 Additional paid in capital 600,000 Retained earnings (balance at 1/1/17) 101,520 The companys income tax rate is 20%.

11. prepare a cost of goods sold budget