Ratchet Now would also like to develop a labor budget. It takes 0.25 hours to make one
Question:
Ratchet Now would also like to develop a labor budget. It takes 0.25 hours to make one set of ratchets. Labor costs the company $16 per hour. Using this information and the information from Exercise 5, develop the labor budget for the company.
Data from Exercise 5
Ratchet Now makes a ratchet set that is compact for ease of use and storage. It predicts it will sell 100,000 units in Quarter 1,125,000 units in Quarter 2,140,000 units in Quarter 3, and 150,000 units in Quarter 4. It expects that in Quarter 1 of the following year, it will also sell 150,000 units. Opening inventory is 20,000 units. The company wants to retain 20% of the next quarter’s sales on hand as ending inventory. Using this information, develop a production budget for Ratchet Now.
Step by Step Answer:
Managerial Accounting An Integrative Approach
ISBN: 9780999500491
2nd Edition
Authors: C J Mcnair Connoly, Kenneth Merchant