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 $68. Wesley expects the following unit sales: Wesley's ending finished goods inventory policy is 30 percent of the next month's sales. Suppose each handisaw takes approximately .60 hours to manufacture, and Wesley pays an average labor wage of $30 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending raw materials inventory policy of 20 percent of the following month?s production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units) and $1.20 per unit variable manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required: 1. Compute the following for the first quarter (Round your intermediate calculations for Direct Labor Budget to 2 decimal places and other intermediate calculations to nearest whole dollar.)

Explanation / Answer

2)Budgeted production in units

**Beginning inventory is ending inventory of last month.

3)production requirement of april :

4)

Jan Feb March Total Desired sales 6000 6200 6700 18900 ending Inventory desired 1860 (6200*.30) 2010   (6700*.30) 1950   (6500*.30) 5820 less:beginning inventory (1800 )    [6000*.30] (1860) (2010) (5670) production 6060 6350 6640 19050

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