Answer question 4 to 7 by making use of the following information: Sea & Co expe

Question

Answer question 4 to 7 by making use of the following information:

Sea & Co expects to sell 17 000 floating boards for $13.00 each. Direct materials costs are $4.00, direct manufacturing labour is $2.50, and manufacturing overhead is $1.20 per floating board. The following inventory levels apply to the budget period (2017):

6) On the 2017 budgeted income statement, what amount will be reported for cost of goods manufactured?

Select one:

a. $140 140

b. $72 800

c. $68 000

d. $130 900

Beginning inventory Ending inventory Direct materials 18 000 units 18 000 units Work-in-process inventory 0 units 0 units Finished goods inventory 3 000 units 4 200 units

Explanation / Answer

Units manufactured =Ending finished goods +units sold - Beginning Finshed goods

         = 4200+17000-3000.

          = 18200 units

Unit product cost:4+2.5+1.2= $7.7 per unit

cost ofgoods manufactured = 18200*7.7 =$ 140140

correct option is "A"

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