The following information has been gathered by the Budget Director of the Jennie Company, another outfit managed

by the Liza Company. The firm manufactures and sells only one product. The selling price during the coming month

is expected to be the prevailing price P5.00 per unit. Expected sales during the month is a total of 75,000 units of finished

goods. Finished goods expected to be on hand at the end of the month total 50,000 units. Finished goods expected to be

on hand at the beginning of the month total 42,000 units.

Direct labor cost is P3.00 per hour. One-fourth direct labor hour is required to manufacture each unit of finished product.

Factory overhead is applied to production on the basis of direct labor hours. Variable factory expenses at the planned

level of operations is expected to amount P33,200; fixed overhead is expected to amount to P99,600.

The raw materials expected to be on hand at the beginning of the month total 5,000 yards. Only one kind of raw material

is used to produce the finished goods. One and one-half yards of raw material are needed to manufacture each unit of

finished good. Raw materials are expected to cost P0.18 per yard during the coming month, its prevailing cost. Raw

materials inventory is expected to increase by 60% during the month.

Variable administrative and selling expenses is P1.00 per unit.

In assisting the company to formulate the budget, you determined the following budget parameters.

1. The total expected peso sales

2. Finished goods in units to be produced during the month is

3. Budgeted cost of raw materials to be used in production is

4. Budgeted raw materials purchases cost is

5. Budgeted direct labor hours is

6. Variable factory overhead cost per direct labor hour is

7. Fixed overhead cost per direct labor hour is

8. Budgeted cost of goods sold (expected sales in units @ total cost per unit)

9. Net profit before tax

Answer rating: 100% (QA)

1 The total expected peso sales can be calculated by multiplying the expected sales volume 75000 units by the selling price per unit 500 Total expecte... View the full answer