1) Contempo Futon manufactures futons. The estimated number of sales for the last quarter of 2018 is asfollows:

Month Sales #

October: 20,000

November: 25,000

December: 30,000

Beginning finished goods inventory should be equal to 30 percent of thatmonth's budgeted sales plus 10 percent of the followingmonth's budgeted sales. January and February 2018 sales are anticipated to be15,000 futons in each month. The cost to produce a futon is$125.

What will be ContempoFuton's cost of goods manufactured forDecember?

2) Gregory Enterprises has identified three cost pools to allocate overhead costs. The following estimates are provided for the coming year:

Cost Pool Overhead Costs Cost driver Activity level

Supervision of direct labour$320,000Direct labour hours800,000

Machine maintenance$120,000Machine hours960,000

Facility rent $200,000Square metres of area100,000

Total overhead costs $640,000

The accounting records show the Mossman Job consumed the following resources:

Cost driver Actual level

Direct labour-hours200

Machine-hours1,600

Square metres of area50

If Gregory Enterprises uses an ABC system then what amount of indirect costs will be allocated to the Mossman job?

Answer rating: 100% (QA)

Answer 1 Contempo Futons Cost of Goods Manufactured COGM for December Step 1 Calculate Beginning Finished Goods Inventory for December Decembers budge... View the full answer