Exercise 21-10 (Part Level Submission) Lowell Company makes and sells artistic f
ID: 2564492 • Letter: E
Question
Exercise 21-10 (Part Level Submission) Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2017. anuary February March AprilMay 12,000 Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour 14,000 13,000 1,000 11,000 $50.00 $47.50 $47.50 $47.50 $47.50 1.5 $8.00 $8.00$9.00 $9.00 2.0 2.0 1.5 1.5 $8.00 Lowell has a labor contract that calls for a wage increase to $9.00 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 17,600 frames on hand and has a policy of carrying an end-or month inventory of 100% of the ollowing months sies is of the second following month's sales.Explanation / Answer
Lowell Company:
Production budget
for the quarter ending 31march ,2017.
desired ending inventory:
ending inventory of march will be entered in total column, since this is the ending inventory units for whole quarter.
(in other words for ending inventory , total of the ending inventories should not be done and only last month of the quarter's ending units should be entered into).
note1:
beginning inventory will be closing inventory of previous month.
only beginning inventory of january will be entered in the total column, since this was the beginning inventory for the quarter.
January February March Total Estimated unit sales 12,000 14,000 13,000 39,000 Plus: Desired ending inventory (see note) 19,200 17,400 15,400 15,400 Total needs 31,200 31,400 28,400 54,400 Less: Beginning inventory (see note1) 17,600 19,200 17,400 17,600 Production needed 13,600 12,200 11,000 36,800Related Questions
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