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Grady manufactures medical supply kits. Projected production for the first months of production are (hint: no beginning inventory for October): Oct production 21,000 Nov
Grady manufactures medical supply kits. Projected production for the first months of production are (hint: no beginning inventory for October): Oct production 21,000 Nov production 24,000 There are four materials per kit at a cost of $1.67 each. The company desires to have enough materials on hand at month end to supply 20% of next month's production. Payments for material purchases are made 50% in the month purchased and the rest in the next month. Each kit uses 0.75 hours of direct labor at $15.00 per hour, payable in the month worked. Indirect costs are fixed per month at $81,000 and includes $20,000 of depreciation, and are payable in the month incurred. What should they budget for cash payments for production costs in October?
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