Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tomorrow Ltd. is a manufacturer that makes one product. It provided the following information to help prepare the master budget for the next four months
Tomorrow Ltd. is a manufacturer that makes one product. It provided the following information to help prepare the master budget for the next four months of operations:
- The budgeted selling price per unit is $71. Budgeted unit sales for June, July, August, and September are 140,100; 144,900; 150,000; and 148,400 units, respectively. All sales are on credit.
- The ending finished goods inventory equals 10% of the following month's sales.
- The ending raw materials inventory equals 5% of the following months raw materials production needs.
- Each unit of finished goods requires 4 ounces of raw materials. The raw materials cost $2.50 per ounce.
- The direct labor wage rate is $8.00 per hour. Each unit of finished goods requires 1.25 direct labor-hours.
- Variable manufacturing overhead is $4.00 per direct labor-hour. Fixed manufacturing overhead is zero.
The estimated finished goods inventory balance at the end of August is closest to:
a. | $350,250 | |
b. | $362,250 | |
c. | $371,000 | |
d. | $375,000 | |
e. | $382,000 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started