PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d] Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $58. Wesley expects the following unit sales: January 5,000 February 5,200 March 5,700 April 5,500 May 4,900 Wesleys ending finished goods inventory policy is 25 percent of the next months sales. Suppose each handisaw takes approximately .60 hours to manufacture, and Wesley pays an average labor wage of $20 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $8.00 each. The company has an ending raw materials inventory policy of 20 percent of the following months production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesleys selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: 1. Compute the following for the first quarter: (Do not round your intermediate calculations.)

PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, dl Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $58. Wesley expects the following unit sales January February March 5,000 5,200 5,700 5,500 4,900 May Wesley's ending finished goods inventory policy is 25 percent of the next month's sales Suppose each handisaw takes approximately .60 hours to manufacture, and Wesley pays an average labor wage of $20 per hour Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $8.00 each. The company has an ending raw materials inventory policy of 20 percent of the following month's production requirements. Materials other than the housing unit total $4.50 per handisaw manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable 1. Compute the following for the first quarter: (Do not round your intermediate calculations.) January February March 1st Quarter total 922,200 10,975 87,840 131,700 $ 290,000 $ 301,600 330,600 1. Budgeted Sales Revenue 2. Budgeted Production in Units 5,325 5,650 Budgeted Cost of Raw Material Purchases for the Plastic Housings $ 43,120 44,720 $ 4. Budgeted Direct Labor Cost $ 63,900 $ 67,800 S