Question
Fullerton, Inc. makes and sells a single snowboard model, the Titan. In the fall of 2019, Fullerton gathered the following data to prepare budgets
Fullerton, Inc. makes and sells a single snowboard model, the Titan. In the fall of 2019, Fullerton gathered the following data to prepare budgets for 2020: Materials and Labor Requirements Wood 9 board feet (b.f.) per snowboard Fiberglass 10 yards per snowboard Direct labor 5 hours per snowboard CEO expects to sell 2,900 snowboards during 2020 at an estimated retail price of $650 per board. Further, the CEO expects 2020 beginning inventory of 500 snowboards and would like to end 2020 with 200 snowboards in stock. The inventoriable unit cost for beginning finished goods inventory on January 1, 2020 is $374.80. Data pertaining to the direct materials inventories are as follows: Beginning Inventory. 2020 Ending Inventory, 2020 Wood 2,040 b.f. 1,540 b.f. Fiberglass 1,040 yards 2,040 yards Variable manufacturing overhead is $7 per direct labor-hour. There are also $81.000 in fixed manufacturing overhead cots budgeted for 2020. Both variable and fixed overhead costs are allocated based on direct manufacturing labor-hours.
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