Question 5 Detmer Enterprises has the following budgeted sales: Budgeted Sales i

Question

Question 5

Detmer Enterprises has the following budgeted sales:

                  Budgeted Sales in Units

September............5,400 units

October................3,900 units

November.............7,200 units

December.............9,900 units

Past experience has shown that the ending finished goods inventory for
each month should be equal to 30% of the next month's expected sales in
units. Additionally, it is known that every unit produced requires four
direct labor hours to make and direct laborers are paid $18 per hour.

Assume that Detmer pays 65% of its direct labor in the same month the
employee works and pays the other 35% in the month after the employee
works.

Calculate the budgeted salaries payable balance reported in the pro
forma balance sheet at November 30. Do not use decimals in your
answer.

Explanation / Answer

Budgeted production in November = 7200+(9900*30%)-(7200*30%)= 8010 Direct labor cost for November = 8010*4*18= 576720 Budgeted salaries payable at November 30 = 576720*35%= 201852

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