Things are looking good for Ratchet Now. Next, it wants to prepare its overhead budget. Variable overhead
Question:
Things are looking good for Ratchet Now. Next, it wants to prepare its overhead budget. Variable overhead cost per ratchet set is $0.50, and the fixed overhead costs are estimated to be $25,000 per quarter. Using this information and the information from Exercise 5, develop the overhead budget for Ratchet Now.
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