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 $56. Wesley expects the following unit sales: January 4,800 February 5,000 March 5,500 April 5,300 May 4,700 Wesleys ending finished goods inventory policy is 30 percent of the next months sales. Suppose each handisaw takes approximately .60 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 $6.00 each. The company has an ending raw materials inventory policy of 20 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.
Compute the following for the first quarter: Jan Feb March Budgeted Sales Revenue Budgeted Production in Units Budgeted Cost of Raw Materials Budgeted Direct Labor Cost |
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