Question
Mercury Bag Company produces cases of grocery bags. The managers at Mercury are trying to develop budgets for the upcoming quarter. The following data have
| Mercury Bag Company produces cases of grocery bags. The managers at Mercury are trying to develop budgets for the upcoming quarter. The following data have been gathered: |
| Projected sales in units | 1,540 | cases | |
| Selling price per case | $ | 240 | |
| Inventory at the beginning of the quarter | 150 | cases | |
| Target inventory at the end of the quarter | 100 | cases | |
| Direct labor hours needed to produce one case | 2 | hours | |
| Direct labor wages | $ | 10 | per hour |
| Direct materials cost per case | $ | 8 | |
| Variable manufacturing overhead cost per case | $ | 6 | |
| Fixed overhead costs for the upcoming quarter | $ | 220,000 | |
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| |||
| a. | Using the above information, develop Mercury's sales forecast in dollars and production schedule in units. |
| b. | What is Mercury's budgeted variable manufacturing cost per case? |
| c. | Prepare Mercury's manufacturing cost budget. (Round your cost per unit answer to 2 decimal places.) |
| d. | What is the projected ending value of the Inventory account? (Round your intermediate calculations to 2 decimal places and final answer to the nearest dollar amount.) |
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Auditing Information Systems
Authors: Jack J. Champlain
2nd Edition
0471281174, 978-0471281177
