Question

Vista Electronics, Inc. manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data.

• Sales forecast for 20x0 (all units to be shipped in 20x0):

Product Units Price

Light coil 58,000 $280

Heavy coil 38,000 380

• Raw-material prices and inventory levels:

Raw Material Expected Inventories, Desired Inventories, Anticipated

January 1, 20x0 December 31, 20x0 Purchase Price

Sheet metal 36,000lb. 40,000lb. $15

Copper wire 33,000lb. 36,000lb. 8

Platform 5,800units 6,800units 4

• Use of raw material:

Amount Used per Unit

Raw Material Light Coil Heavy Coil

Sheet metal 4lb. 5lb.

Copper wire 2lb. 3lb.

Platform 2unit

• Direct-labor requirements and rates:

Product Hours per Unit Rate per Hour

Light coil 3 $15

Heavy coil 5 20

• Finished-goods inventories (in units):

Product Expected January Desired December

1, 20x0 31, 20x0

Light coil 23,000 28,000

Heavy coil 9,500 10,500

• Production overhead:

Overhead Cost Item Activity-Based Budget Rate

Purchasing and material handling $0.80per pound of sheet metal and copper wire purchased

Depreciation, utilities, and inspection $7.00per coil produced (either type)

Shipping $2.00per coil shipped (either type)

General production overhead $5.00per direct-labor hour

1. Prepare the sales budget (In dollars) for 20x0. Sales Budget for 20x0 Total Light coils Heavy coils Projected sales