Cornerstone Exercise 8.6 (Algorithmic) Ending Finished Goods Inventory Budget

Play-Disc makes Frisbee-type plastic discs. Each 12-inch diameter plastic disc has the following manufacturing costs:

Direct materials	$1.85
Direct labor	0.50
Variable overhead	0.75
Fixed overhead	1.80
Total unit cost	$4.90

For the coming year, Play-Disc expects to make 360,000 plastic discs, and to sell 341,000 of them. Budgeted beginning inventory in units is 20,000 with unit cost of $4.90. (There are no beginning or ending inventories of work in process.)

Required:

Hide

1.Prepare an ending finished goods inventory budget for Play-Disc for the coming year. If required, round your answers to the nearest cent.

Play-Disc
Ending Finished Goods Inventory Budget
For the Coming Year
Unit costs:
Direct Materials	$
Direct Labor
Overhead:
Budgeted Variable Overhead
Budgeted Fixed Overhead
Total cost per unit	$
Total ending inventory cost	$

2.What if

Finished goods inventory hassales increased to 361,000 discs? How would that affect the ending finished goods inventory budget? Calculate the value of budgeted ending finished goods inventory.- Select your answer -increaseddecreasedCorrect 1 of Item 2to$