Refer to Exercise 22-8. Prepare In Exercise 22-8 Ramos Co. provides the following sales forecast and production
Question:
In Exercise 22-8
Ramos Co. provides the following sales forecast and production budget for the next four months:
The company plans for finished goods inventory of 120 units at the end of June. In addition, each finished unit requires 5 pounds of direct materials and the company wants to end each month with direct materials inventory equal to 30% of next month's production needs. Beginning direct materials inventory for April was 663 pounds. Direct materials cost $2 per pound. Each finished unit requires 0.50 hours of direct labor at the rate of $16 per hour. The company budgets variable overhead at the rate of $20 per direct labor hour and budgets fixed overhead of $8,000 per month.
(1) A direct labor budget
(2) A factory overhead budget for April, May, and June.
Step by Step Answer:
Fundamental Accounting Principles
ISBN: 978-1259536359
23rd edition
Authors: John Wild, Ken Shaw, Barbara Chiappett