Wilson Industries produces an assembly used in the production of various product

Question

Wilson Industries produces an assembly used in the production of various products. The assembly is sold to various manufacturers throughout the United States. The unit selling price is $ 195.00. A projected sales forecast (in units) follows: January 20,000 February 25,000 March 30,000 April 40,000 May 35,000 The following information pertains to production policies and manufacturing specifications followed by Wilson Industries: Finished goods inventory on January 1st was 8,000 units. The desired ending inventory for each month is 40 percent of the next month’s sales. Materials used in the assembly are as follows: Direct Material Part # Parts Per Unit Cost per Part Widget 325 5 $ 8.00 Whatnot 326 3 $ 2.00 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to produce 50 percent of that month’s production needs. (THINK!!) This is exactly the amount of material on hand on January 1st. The direct labor used per unit of assembly is two hours. The average direct labor cost per hour is $ 14.00. The predetermined variable overhead is allocated at the rate of $ 13.00 per direct labor hour. Fixed overhead averages $265,000 per month. The following information pertains to sales/purchases and their related cash collections/disbursements pattern: On average, credit sales are 80% of total sales. On average, 25% of credit sales are collected in the month of sale; 55% of credit sales are collected in the month following sale; 15% of credit sales are collected in the second month following sale. Cash sales for November and December were $ 700,000 and $ 950,000 respectively. (THINK!!) All material purchases are on account. On average, 30% of material purchases are paid in the month of purchase; 70% of material purchases are paid in the month following purchase. Material purchases for November and December were $ 974,300 and $ 1,158,000 respectively. Given the above information, answer the following questions. (****Hints: prepare a skeleton of the following budgets for the first quarter: sales, production, D/M, D/L, OVH, cash receipts, cash disbursements; plug in the appropriate data; complete the budgets; answer the questions; since there are 2 D/M (widgets and whatnots), you will need 2 D/M budgets – one for each part; credit will NOT be given for carry-thru errors so make sure your budgets are prepared properly; see me for help. Read the information carefully****)

12 Questions

1. How many whatnots (i.e., units) should there be in inventory at the beginning of the quarter?

2. How many widgets (i.e., units) need to be purchased in January?

3. What is the total cost of Direct Materials for February?

4. How many Direct Labor hours are needed in January?

5. What is the total cost for Direct Labor for the first quarter?

6. How much is budgeted variable overhead for February?

7. How much is budgeted fixed overhead for the first quarter?

8. What is the total overhead cost for March?

9. What were cash sales for the first quarter?

10. What $ amount of January credit sales is estimated for collection in February?

11. What $ amount of February purchases is estimated for payment in March?

12. What is the estimated payment for January for material purchases?

Explanation / Answer

Wilson Industries produces an assembly used in the production of various product

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.