24) Wasilko Corporation produces and sells one product a. The budgeted selling p

Question

24) Wasilko Corporation produces and sells one product a. The budgeted selling price per unit is $114. Budgeted unit sales for February is 9,900 units b. Each unit of finished goods requires 6 pounds of raw materials. The raw materials cost $4.00 per pound. c. The direct labor wage rate is $24.00 per hour. Each unit of finished goods requires 2.4 direct labor-hours d. Manufacturing overhead is entirely variable and is $9.00 per direct labor-hour. e· The variable selling and administrative expense per unit sold is $1.60. The fixed selling and administrative expense per month is $70,000. The estimated net operating income (loss) for February is closest to A) $50,000 B) $91,080 C) $21,080 D) S36,920

Explanation / Answer

Answer is C. $ 21080 Explanation: Budgeted Income Stattement Sales revenue (9900 units @ 114) 1128600 Less: Cost of goods sold Raw material (59400 pounds @ 4) 237600 Directt labour (23760 hours @ 24) 570240 Variable Mfg Oh (23760 hours @9) 213840 Gross margin 106920 Less; Selling annd admin OH Variable (9900 units @1.60) 15840 Fixed admin Oh 70000 Net income 21080

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