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Royal Company is preparing budgets for the quarter ending June 30. Budgeted sales for the next five months are: April 20,000 units May 50,000 units
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Royal Company is preparing budgets for the quarter ending June 30.
Budgeted sales for the next five months are:
April 20,000 units
May 50,000 units
June 30,000 units
July 25,000 units
August 15,000 units
The selling price is $10 per unit.
Find:- Total Per-Unit Manufacturing Cost at Quarter End (June)
- Value of Ending Finished Goods Inventory at Quarter End (June)
PLEASE SHOW ALL WORK
Ending Finished Goods Inventory Budget Per-Unit Direct Materials - $0.40/pound * 5 pounds/unit-$2/unit Per-Unit Direct Labor -0.05 hours/unit * $10/hour $0.50/unit Per-Unit MOH - $76,000/26,000 units $2.92 *NOTE: Per-Unit MOH will be calculated for the entire quarter. For the purposes of the example, let's just assume we only have April. Total Per-Unit Manufacturing Costs $2+$0.50+$2.92-$5.42/unit *NOTE: This is absorption costing approach. April Ending FG Inventory = 10,000 units * $5.42/unit = $54,200 (from Production Budget) *NOTE: Again, we would usually do this for end of quarter. Now Royal can complete the ending finished goods inventory budget. The first step in preparing this budget is to compute the direct materials cost per unit which is 5 pounds of direct material at 40 cents per pound, for a total of $2.00 per unit. The information needed can be derived by referring back to the direct materials budgetStep by Step Solution
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