Questlons 8-14 fof The following information applies to the questions displayed

Question

Questlons 8-14 fof The following information applies to the questions displayed below organton Company makes one product and it provided the following information to help prepare the master budget for ts first four months of operetions unE 5/0 Budgeted u August and Sestember are 8,500 16,000 1.000 and 1900 spectauely Al sales are on creat Forty percent of credit or creat sales are colected inte month ofte sae ad 60% inthe fo10Mng month are Treening finished goods mertory equals 20%ofthe folowing month's unit sales The ending rew materas mentory equals ?0%ofthe folowing Trirty percent of raw matenals purchases are paid for in the month of purchase and 70% In the following month month's raw matenials production needs Each unt of finished goods requires 5 pounds of raw materials. The raw materials cost $2.00 per pound t The direct labor wage rate Is $13 per hour. Each unit of finished goods requires two direct labor -hours g The variable selling and administretive expense per unit sold is $170. The fixed seling and administrative expense per month is $66000

Explanation / Answer

Answer 10) Calulation of Number of units produce in july :

= Closing stock + Sales - Opening Stock

here,

Opening Stock = 3200 Units (20% of 16000 Units Sales of July months)

Closing Stock = 3600 Units (20% of 18000 Units Sales of August Months)

Units Produce of July = 3600+16000-3200 = 16400 Units

Direct Labour cost = 16400 Units *$13 per hour * 2 Hour = $426400

Answer 11) Units Product Cost :  

Raw Material Cost : 5 Pounds Of Material * $2 per Pound = $10

Direct Labour Cost : 2 Hour * $13 per Hour = $26

Overhead Cost : 2 Hour * $8 per Hour = $16

Unit Cost : Raw Material Cost + Direct Labour + Overhead Cost

= 10+26+16 = $52 Cost

Answer 12) Finished Goods of July = 3600 Units

Cost of Inventory = 3600*52 = $187200

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