Item 8 Sarafiny Corporation is in the process of preparing its annual budget. Th

Question

Item 8

Sarafiny Corporation is in the process of preparing its annual budget. The following beginning and ending inventory levels are planned for the year.

Each unit of finished goods requires 2 grams of raw material. The company plans to sell 330,000 units during the year.

The number of units the company would have to manufacture during the year would be:

Multiple Choice

8b.

LBC Corporation makes and sells a product called Product WZ. Each unit of Product WZ requires 2.3 hours of direct labor at the rate of $19.00 per direct labor-hour. Management would like you to prepare a Direct Labor Budget for June.

The budgeted direct labor cost per unit of Product WZ would be:

Multiple Choice

Beginning Inventory Ending Inventory Finished goods (units) 26,000 36,000 Raw material (grams) 56,000 46,000

Explanation / Answer

8 Units sales 330000 Add: Finished goods (units) Ending Inventory 36000 366000 Less: Finished goods (units) Beginning Inventory 26000 Units to manufacture 340000 Option 3 is correct 8b Budgeted direct labor cost per unit of Product WZ = 2.3*19= $43.70 Option 4 is correct

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