Refer to information from QS 22-8. Forrest Company assigns variable overhead at the rate of $ 1.50 per unit of production. Fixed overhead equals $ 4,600,000 per month. Prepare a factory overhead budget for November.
In QS 22-8, Forrest Company manufactures watches and has a JIT policy that ending inventory must equal 10% of the next month’s sales. It estimates that October’s actual ending inventory will consist of 40,000 watches. November and December sales are estimated to be 400,000 and 350,000 watches, respectively. Compute the number of watches to be produced that would appear on the company’s production budget for the month of November.