Internal Operating Schedules

Chapter 4: Section 4.4 Pages 138-142

Partial Credit earned with A-D worth 25 points each

Read the section on Internal Operating Schedules and refer to the figures and tables to complete the sections below.

1. Assume you have developed and tested a prototype electronic product and are about to start your new business. You purchase pre-programmed computer chips at $70 per unit. Other component costs include: plastic casings at $15 per unit and assembly hardware at $5 per unit. Direct labor costs are $15 per hour and three units can be produced per hour. You intend to sell each unit at a 50 percent mark-up over the total costs of producing each unit. The plan is to produce 500 product units per month in January, February, and March. Sales are expected to be: 200 units in January, 400 units in February, and 800 units in March.

1. Calculate the dollar amount of sales revenue expected in each month (i.e., January, February, and March) and for the first quarter of the year.

Computer chips

Plastic casings

Assembly hardware

Direct labor ($15/3)

Total costs

Mark-up = $ () =

Dollar Sales:

January:

February:

March:

First Quarter

2. Prepare a cost of production schedule for January, February, and March.

Cost of Production Schedule:

Cost

Per Unit January February March

Production (units) 500 500 500

Production costs

Computer chips

Plastic casings

Assembly hardware

Direct labor

Total costs

Prepare a cost of goods sold schedule for each of the three months and for the first quarter of the year. Using your cost of goods sold estimates and the sales revenues

Internal Operating Schedules

Chapter 4: Section 4.4 Pages 138-142

Partial Credit earned with A-D worth 25 points each

Read the section on Internal Operating Schedules and refer to the figures and tables to complete the sections below.

1. Assume you have developed and tested a prototype electronic product and are about to start your new business. You purchase pre-programmed computer chips at $70 per unit. Other component costs include: plastic casings at $15 per unit and assembly hardware at $5 per unit. Direct labor costs are $15 per hour and three units can be produced per hour. You intend to sell each unit at a 50 percent mark-up over the total costs of producing each unit. The plan is to produce 500 product units per month in January, February, and March. Sales are expected to be: 200 units in January, 400 units in February, and 800 units in March.

1. Calculate the dollar amount of sales revenue expected in each month (i.e., January, February, and March) and for the first quarter of the year.

Computer chips

Plastic casings

Assembly hardware

Direct labor ($15/3)

Total costs

Mark-up = $ () =

Dollar Sales:

January:

February:

March:

First Quarter

2. Prepare a cost of production schedule for January, February, and March.

Cost of Production Schedule:

Cost

Per Unit January February March

Production (units) 500 500 500

Production costs

Computer chips

Plastic casings

Assembly hardware

Direct labor

Total costs