Wesley Power Tools manufactures a wide variety of tools and accessories. One of

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 information about this product line to complete the problem requirements. Each handisaw sells for $40. Wesley expects the following unit sales:

Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.

      Suppose each handisaw takes approximately .55 hours to manufacture, and Wesley pays an average labor wage of $15.50 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 10 percent of the following month’s production requirements. Materials other than the housing unit total $4.00 per handisaw.

      Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 24,000 units) and $1.00 per unit variable manufacturing overhead. Wesley’s selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $15,000 per month.

1. Compute the budgeted cost of goods sold following for the first quarter. (Round cost per unit to 2 decimal places. Round final answers to the nearest dollar amount.) For January Feburary and March.

Compute the budgeted selling and administrative expenses following for the first quarter.

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 $40. Wesley expects the following unit sales:

Explanation / Answer

Labor Direct Materials Indirect Materials Manufacturing Overheads Month Sales Hours Cost Used Cost Used Cost Fixed Variable Total COGS Selling Exp Admin Exp Jan 2100 1155 17902.5 2100 12600 2100 8400 6300 2100 8400 47302.5 5040 15000 Feb 2500 1375 21312.5 2500 15000 2500 10000 7500 2500 10000 56312.5 6000 15000 Mar 3100 1705 26427.5 3100 18600 3100 12400 9300 3100 12400 69827.5 7440 15000

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