Question
The following information is available regarding JK Inc. for January: Budgeted sales and production are both 50,000 units. Each unit produced requires 3 ounces of
The following information is available regarding JK Inc. for January:
Budgeted sales and production are both 50,000 units. Each unit produced requires 3 ounces of material D at a cost of $10 per ounce and 2 direct labor hours at a cost of $20 per hour.
Budgeted beginning and ending inventories for material D are 5,000 and 10,000 ounces, respectively. 50% of the cost of material D purchases are paid in the month of purchase and 50% are paid in the month after purchase. There were no accounts payable outstanding at the start of the month.
The budgeted variable overhead rate is $40 per direct labor hour and budgeted fixed overhead costs are $1 million, including $500,000 of depreciation.
The budgeted variable SG&A rate is $10 per unit sold. There are no budgeted fixed SG&A costs.
Budgeted ending finished goods inventory is 10,000 units.
For January, compute:
1) Budgeted cost of material D purchases.
2) Total budgeted cash outflows (disbursements).
3) Budgeted value of ending finished goods inventory.
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