C ezto mheducation.com/hm.tpx Wesley Power Tools manufactures a wide variety of

Question

C ezto mheducation.com/hm.tpx Wesley Power Tools manufactures a wide variety of tools and accessories One of its more popular items is a cordless power handisaw. Each handisaw sels for $66 Wesley expects the following unit sales: 5,800 6,000 6,500 6.300 5.700 January April May Wesley's ending finished goods inventory policy is 20 percent of the next month's sales Suppose each handisaw takes approximately 75 hours to manufacture, and Wesley pays an average labor wage of $28 per hour Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $8.00 each. The policy of 25 percent of the following month's 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. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required 1. Compute the following for the first quarter: (Do not round your intermediate calculations.) 2. Budgeted Production in Units Cost of 4. Budgeted Direct Labor Cost :24 PM /3/2018 Type here to search

Explanation / Answer

SALES BUDGET Jan Feb mar QUARTER April May Budgeted Sales units 5,800 6,000 6,500 18,300 6,300 5,700 Selling price per unit 66 66 66 66 66 66 Total Sales 382,800 396,000 429,000 1,207,800 415,800 376,200 PRODUCTION BUDGET Jan Feb mar QUARTER April May Budgeted Sales Units 5,800 6,000 6,500 18,300 6,300 5,700 Add: Desired Ending Finished inventory 1,200 1,300 1,260 1,260 1,140 Total Needs 7,000 7,300 7,760 19,560 7,440 Less: Beginning Finished Inventory 1,160 1,200 1,300 1,160 1,260 Required Production in units 5,840 6,100 6,460 18,400 6,180 RAW MATERIAL PURCHASE BUDGET Jan Feb mar QUARTER April Budgeted Production units 5,840 6,100 6,460 18,400 6,180 Raw material required per unit 1 1 1 1 1 Ttotal Production needs 5,840 6,100 6,460 18,400 6,180 Add: Desired Ending Inventory 1,525 1,615 1,545 1,545 Total needs 7,365 7,715 8,005 19,945 Less: Beginning Inventory 1,460 1,525 1,615 1,460 Purchase Units 5,905 6,190 6,390 18,485 Cost price per unit 8.00 8.00 8.00 8.00 Budgeted Purchase in $ 47,240 49,520 51,120 147,880 LABOUR COST BUDGETS Jan Feb mar QUARTER Units to be produced 5,840 6,100 6,460 18,400 Labour required per unit 0.75 0.75 0.75 0.75 Labour hours 4380 4575 4845 13800 Labuor Rate per hour 28 28 28 28 Budgeted Labour cost in $ 122,640 128,100 135,660 386,400

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