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Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process
Krouse Company produces two products, forged putter heads and laminated putter heads, which are sold through specialty golf shops. The company is in the process of developing its operating budget for the coming year. Selected data regarding the company's two products are as follows: Putter Heads Raw materials: Steel Copper Direct labor Expected sales (units) Selling price per unit Ending inventory target (units) Beginning inventory (units) Beginning inventory (cost) a. $46. b. $62. c. $52. d. $42. Putter Heads 00 Forged 2 pounds @ $5/lb. None 1/4 hour @ $20/hr. 8,200 $30 100 300 $5,250 $3,120 Manufacturing overhead is applied to units using direct labor hours. Variable manufacturing overhead is projected to be $25,000, and fixed manufacturing overhead is expected to be $15,000. The estimated cost to produce one unit of the laminated putter head is: Laminated 1 pound @ $5/lb. 1 pound @ $15/lb. 1 hour @ $22/hr. 2,000 $80 60 60
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