Wesley Power Tools manufactures a wide variety of tools and accessories. One of

Question

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following information about this product line to complete the problem requirements. Each handisaw sells for $80. Wesley expects the following unit sales January February March April May 2,000 2,700 3,100 2,600 2,200 Wesley's ending finished goods inventory policy is 35 percent of the next month's sales. wage of $13.50 per hour The company has an ending raw materials inventory policy of 10 percent of the following month's production Suppose each handisaw takes approximately .45 hours to manufacture, and Wesley pays an average labor Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. requirements. Materials other than the housing unit total $4.00 per handisaw Manufacturing overhead for this product includes $83,000 annual fixed overhead (based on production of 24,000 units) and $1.00 per unit variable manufacturing overhead. Wesley's selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $14,000 per month. Required: 1. Compute the budgeted cost of goods sold following for the first quarter. (Round cost per unit to2 decimal places. Round final answers to the nearest dollar amount.) March 1st Quarter Total Budgeted Cost of Goods Sold 2. Compute the budgeted selling and administrative expenses following for the first quarter March 1st Quarter T Budgeted Selling and Administrative ExpensesS 20,000 S 22,100 S 23,300 S 85,400 3. Complete the budgeted income statement for the handisaw product for the first quarter. (Round cost per

Explanation / Answer

Budgeted Cost of Goods Sold is as follows :=

Working Notes:

2) Sales & Admin Expense Budget is as follows :

Months Plastic housing Other Material Wages F. Overheads V. Overheads Total Jan 11522.50 8980.00 13638.38 5250.00 2245.00 41635.88 Feb 14242.50 11360.00 17253.00 5250.00 2840.00 50945.50 Mar 14392.50 11700.00 17769.38 5250.00 2925.00 52036.88 1st Qtr 40157.50 32040.00 48660.75 15750.00 8010.00 144618.25

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