Question 1

Preparing an Ending Finished Goods Inventory Budget

Andrews Company manufactures a line of office chairs. Each chair takes $12 of direct materials and uses 1.9 direct labor hours at $14 per direct labor hour. The variable overhead rate is $1.30 per direct labor hour and the fixed overhead rate is $1.30 per direct labor hour. Andrews expects to have 650 chairs in ending inventory. There is no beginning inventory of office chairs.

Required:

1. Calculate the unit product cost. (Note: Round to the nearest cent.) $

2. Calculate the cost of budgeted ending inventory. (Note: Round to the nearest dollar.) $

Question 2

Preparing a Selling and Administrative Expenses Budget

Fazel Company makes and sells paper products. In the coming year, Fazel expects total sales of $18200000. There is a 5% commission on sales. In addition, fixed expenses of the sales and administrative offices include the following:

Salaries	$ 960,000
Utilities	365,000
Office space	230,000
Advertising	1,200,000

Required:

Prepare a selling and administrative expenses budget for Fazel Company for the coming year.

Fazel Company
Selling and Administrative Expenses Budget
For the Coming Year
Variable selling expenses		$
Fixed expenses:
Salaries	$
Utilities
Office space
Advertising
Total fixed expenses
Total selling and administrative expenses		$