Wesley Power Tools manufactures a wide variety of tools and accessories. One of
ID: 2470579 • Letter: W
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 $44. Wesley expects the following unit sales:
January
2,000
February
2,200
March
2,700
April
2,500
May
1,900
Wesley’s ending finished goods inventory policy is 30 percent of the next month’s sales.
Suppose each handisaw takes approximately 0.75 hours to manufacture, and Wesley pays an average labor wage of $18 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 25 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.)
January
February
March
1st Quarter total
Budgeted Sales Revenue
Budgeted Production in Units
Budgeted Cost of Raw Purchases for the Plastic Housings
Budgeted Direct Labor Cost
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 $44. Wesley expects the following unit sales:
Explanation / Answer
Statement showing computations Particulars Jan Feb Mar Apr May Quarter 1 Sales a 2,000.00 2,200.00 2,700.00 2,500.00 1,900.00 6,900.00 Finished Goods @30% of next month b 660.00 810.00 750.00 570.00 750.00 Beginning = Finished of Prev Month c 600.00 660.00 810.00 750.00 570.00 600.00 Budgeted Production d= a+b-c 2,060.00 2,350.00 2,640.00 2,320.00 7,050.00 Budgeted Sales Revenue = 44*a 88,000.00 96,800.00 118,800.00 110,000.00 303,600.00 Time Required e= .75*d 1,545.00 1,762.50 1,980.00 1,740.00 5,287.50 Budgeted Direct Labour Cost =18*e 27,810.00 31,725.00 35,640.00 31,320.00 95,175.00 Plastic Housing for Production f= 1*d 2,060.00 2,350.00 2,640.00 2,320.00 7,050.00 Ending g=25% of next month 587.50 660.00 580.00 580.00 Beginning h= Ending of prev month 515.00 587.50 660.00 515.00 Purchases i = f+g-h 2,132.50 2,422.50 2,560.00 7,115.00 Cost of Purchases for Plastic Housing = 7*i 14,927.50 16,957.50 17,920.00 49,805.00 Other Purchases for Materials k= 4.50*d 9,270.00 10,575.00 11,880.00 31,725.00 Direct Material Cost = j +k 24,197.50 27,532.50 29,800.00 81,530.00
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