A company expects to sell 500 units during the month of April. Beginning finished goods inventory is
Question:
A company expects to sell 500 units during the month of April. Beginning finished goods inventory is 100 units, while ending inventory is expected to be 50 units. They use 2 pounds of materials purchased for $4 per pound to make each unit. The total beginning inventory of materials was 400, while the company expects the ending inventory of materials to be 300 pounds. Each unit requires 0.5 direct labor hours paid at the rate of $10. Variable overhead cost is $4 per direct labor hour, while fixed overhead cost is $10,000.
Required:
How many units must be produced during the month of April?
How many pounds of materials must be purchased during the month of April?
If the purchased materials are paid for in cash, how much cash is required?
Determine the direct labor budget for April.
Determine the total factory overhead budget for April.
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura