(46-47) Gore Inc. is in the process of preparing its annual budget. The followin

Question

(46-47) Gore Inc. is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Each unit of finished goods requires 2 grams of raw material.

46.If the company plans to sell 670,000 units during the year, the number of units it would have to manufacture during the year would be:

47.How much of the raw material should the company purchase during the year? ---------------------

50.The manufacturing overhead budget at Norcross Inc. is based on budgeted direct labor-hours. The direct labor budget indicates that 7,900 direct labor-hours will be required in May. The variable overhead rate is $9.50 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $112,970 per month, which includes depreciation of $18,170. All other fixed manufacturing overhead costs represent current cash flows.

The company re-computes its predetermined overhead rate every month. The predetermined overhead rate for May should be:

Explanation / Answer

the number of units it would have to manufacture during the year would be = 670000-70000= 600000 total budget reqiured for labour hours= 7900*9.50=$75050 available budget = total budget- depriciation = 112970*12-18170*12= $1137600 The predetermined overhead rate for May should be=$1137600

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