Problem 5-32 (Part Level Submission) (a) 1 st Quarter 2 nd Quarter 3 rd Quarter
ID: 2475632 • Letter: P
Question
Problem 5-32 (Part Level Submission)
(a)
1st Quarter
2nd Quarter
3rd Quarter
4th Quarter
Annual
LINK TO TEXT
Problem 5-32 (Part Level Submission)
Sandoval Furniture builds high-end hand-made dining tables. Mackenzie Sandoval, the company’s owner, has developed the following sales forecast for 2015.1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Forecasted sales (tables) 2,538 2,796 2,926 2,055
Because of the time needed to create each table, Sandoval maintains an ending Finished Goods Inventory of 20 percent of the following quarter’s budgeted sales. Sandoval has been following this inventory policy for several years. The company ended 2014 with 508 tables on hand.
The standard cost card for a table is as follows:
Standard Quantity Standard Price Total Standard Cost American cherry wood 25 board feet $5/board foot $125 American cherry turning square (legs) 4 squares $8/square 32 Direct labor 12 DLH $15/DLH 180 Variable overhead 12 DLH $60/DLH 720 Fixed overhead 12 DLH $9/DLH 108 $1,165
Explanation / Answer
Statement showing computations Particulars Q1 Q2 Q3 Q4 Forecasted Sales = a 2,538 2,796 2,926 2,055 Ending inventory @20% of Next Q sales =b 559 585 411 547 Total Units available for sales c= a+b 3,097 3,381 3,337 2,602 Beginning Inventory= Ending of prev Q d 508 559 585 411 Units produced = c-d 2,589 2,822 2,752 2,191
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