Question
Wesley Power tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless handisaw. Each handisaw sells for
Wesley Power tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless handisaw. Each handisaw sells for $60. Wesley expects the following unit sales:
January | 2300 |
February | 2,300 |
March | 2,900 |
April | 2700 |
May | 2,300 |
Wesleys ending finished goods inventory policy is 25 % of the next months sales.
Suppose each handisaw takes approximately 0.55 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour.
Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending direct materials inventory policy of 10% of the following months production requirements. Materials other than the housing unit total $4.00 per handisaw.
Manufacturing overhead for this product includes $63,000 annual fixed overhead (based on production of 24,0000 units) and $0.90 per unit variable manufacturing overhead Wesleys selling expenses are 5% of sales dollars, and administrative expenses are fixed at $15,000 per month.
- Compute the budgeted costs of goods sold for the quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to nearest dollar amount.)
| January | February | March | 1st Quarter total |
Budgeted cost of goods sold |
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- Compute the budgeted selling and administrative expenses for the first quarter.
| January | February | March | 1st Quarter Total |
Budgeted selling and administrative expenses |
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- Complete the budget income statement for the handisaw product for the first quarter. (round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.)
| January | Feburary | March | 1st quarter total |
Budgeted Sales Revenue |
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Budgeted Cost of Goods sold |
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Budget Gross Profit |
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Budgeted Selling And Administrative Expenses |
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Budgeted Net Operating Income. |
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