Question
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following information about this product line to complete the problem requirements. Each handisaw sells for $44. Wesley expects the following unit sales: |
January | 2,000 |
February | 2,200 |
March | 2,700 |
April | 2,500 |
May | 1,900 |
Wesleys ending finished goods inventory policy is 30 percent of the next months sales. |
Suppose each handisaw takes approximately 0.75 hours to manufacture, and Wesley pays an average labor wage of $18 per hour. |
Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending raw materials inventory policy of 25 percent of the following months production requirements. Materials other than the housing unit total $4.50 per handisaw. |
Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesleys selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. |
Required: | |
1. | Compute the following for the first quarter: (Round your intermediate calculations for Direct Labor Budget to 2 decimal places and other intermediate calculations to nearest whole dollar.) |
January | February | March | 1st Quarter Total | |
1. Budgeted Sales Revenue | ||||
2. Budgeted Production in Units | ||||
3. Budgeted Cost of Raw Materials Purchases fo Plastic Housings | ||||
4. Budgeted Direct Labor Costs |
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