his Question: 2 pts 4 of 13 (0 complete)This Quiz: 20 pts po Suppose Steel City

Question

his Question: 2 pts 4 of 13 (0 complete)This Quiz: 20 pts po Suppose Steel City manufactures cast iron skillets. One model is a 10-inch skillet that sells for $28. Steel City projects sales of 650 10-inch skillets per month. The production costs are $6 pe skillet for direct materials, $4 per skillet for direct labor, and $1 per skillet for manufacturing overhead. Steel City has 45 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 40% of the next month's sales. Selling and administrative expenses for this product line are $1,600 per month. Steel City is budgeted to produce 865 skillets in July Compute the total amount budgeted for product costs for July. OA. $10,010 B. S9550 O C. $7,150 O D. $9,515

Explanation / Answer

Production units = 650+(650*40%)-45 = 865

Product cost per unit = 6+4+1 = 11

Total amount of budgeted product cost = 865*11 = 9515

So answer is d) $9515

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