Al Salam Company manufactures wooden desks, and the following are the estimates made by the company for the year 2019:

- The company expects to sell 1500 offices during 2019 distributed as follows: the first quarter 300 offices, the second quarter 500 offices, the third quarter 600 offices, the fourth quarter 100 offices, and the selling price of the office was $200.

- The company plans to maintain finished good inventory quarter, equivalent to 10% of the expected sales for the next quarter, and the finished good inventory of fourth quarter of 2018 was 80 offices. The expected sales for the first quarter of 2020 were equivalent to 200 offices.

- If you know that the amount of wood needed to manufacture one desk is equal to 3 planks of wood, and the price of one board was $12, and the balance of wood boards at the beginning of the year 2019 was 100 boards. A quantity of wood planks equal to 20% of the needs of the next quarter should be kept. The number of offices expected to be produced for the first quarter of 2020 was 140 offices.

- One office needs to be equipped with 7 direct working hours, and the average hourly wage for direct work was $3.

- The variable MOH cost per office is $3 and the fixed MOH cost is $8,000 per quarter. MOH costs are allocated using the number of units produced.

- If you know that the marketing and administrative expenses are distributed as follows: the first quarter 3000 $, the second quarter 5000 $, the third quarter 6000 $, and the fourth quarter 1000 $.

Required: Prepare the income statement budget for 2019.

Answer rating: 100% (QA)

Step 11 Computation of Cost of Goods Sold of Al Salam company Particulars Opening stock of finished ... View the full answer