Meridian Industries manufactures and sells two models of watches, Prime and Luxuria. It expects to sell 3,000 units of Prime and 1,000 units of Luxuria in 2016.The following estimates are given for 2016:

…………….…………….……………………..... Prime ……………. Luxuria

Selling price ………………………………………. $200 ……………… $500

Direct materials…………….…….…….…………. 20 …………….…… 50

Direct labor…………….…………….………………. 40 …………….…. 150

Manufacturing overhead……….……………… 40 …………….…. 100

Meridian had an inventory of 200 units of Prime and 75 units of Luxuria at the end of 2015. It has decided that as a measure to counter stock outages it will maintain ending inventory of 350 units of Prime and 200 units of Luxuria.

Each Luxuria watch requires one unit of Crimpson and has to be imported at a cost of $10. There were 100 units of Crimpson in stock at the end of 2015.The management does not want to have any stock of Crimpson at the end of 2016.

What is the total budgeted cost of goods manufactured in 2016?

Question 5 options:

	A) $600,000
	B) $625,500
	C) $652,500
	D) $667,500

Answer rating: 100% (QA)

C 652500 Working Production Budget Prime Luxuria Expected unit sales 3000 1000 Add Desired endi... View the full answer