value 3.00 points PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d]
ID: 2516476 • Letter: V
Question
value 3.00 points PA8-4 Preparing Operating Budget Components [LO 8-3a, b, c, d] Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $62. Wesley expects the following unit sales: January February March April May 5,400 5,600 6,100 5,900 5,300 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 $24 per hour Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 30 percent of the following month's production requirements. Materials other than the housing unit total $4.50 per handisaw expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month. Required 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 1. Compute the following for the first quarter: (Do not round your intermediate calculations.) January February March 1st Quarter total 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3 Budgeted Cost of Raw Material Purchases for the Plastic Housings 4. Budgeted Direct Labor CostExplanation / Answer
Wesley Power Tools
Computation of the following for the first quarter:
January
February
March
1st Quarter Total
Budgeted sales revenue
$334,800
$347,200
$378,200
$1,060,200
Budgeted production in units
5,460
5,750
6,040
17,250
budgeted cost of raw material purchases for the plastic housings
$27,300
$28,750
$30,200
$86,250
Budgeted direct labor cost
$78,624
$82,800
$86,976
$248,400
January
February
March
1st Quarter Total
Budgeted sales in unit
5,400
5,600
6,100
17,100
unit sales price
$62
$62
$62
Budgeted sales revenue
$334,800
$347,200
$378,200
$1,060,200
Budgeted production in units -
January
February
March
1st Quarter Total
budgeted sales in units
5,400
5,600
6,100
17,100
add: ending inventory
1,680
1,830
1,770
5,280
total production
7,080
7,430
7,870
22,380
Less: Beginning inventory
1,620
1,680
1,830
5,130
production requirement in units
5,460
5,750
6,040
17,250
Budgeted cost of raw material purchases for the plastic housing -
January
February
March
1st Quarter Total
budgeted sales in units
5,400
5,600
6,100
17,100
add: ending inventory
1,680
1,830
1,770
5,280
total production
7,080
7,430
7,870
22,380
Less: Beginning inventory
1,620
1,680
1,830
5,130
production requirement in units
5,460
5,750
6,040
17,250
Budgeted cost of raw material purchases for the plastic housing at $5 per plastic housing
$27,300
$28,750
$30,200
$86,250
Budgeted direct labor cost at $14.40 per unit
($24 x 0.60 hours per unit = $14.40)
January
February
March
1st Quarter Total
Budgeted production in units
5,460
5,750
6,040
17,250
Budgeted direct labor cost at $14.40 per unit
$78,624
$82,800
$86,976
$248,400
January
February
March
1st Quarter Total
Budgeted sales revenue
$334,800
$347,200
$378,200
$1,060,200
Budgeted production in units
5,460
5,750
6,040
17,250
budgeted cost of raw material purchases for the plastic housings
$27,300
$28,750
$30,200
$86,250
Budgeted direct labor cost
$78,624
$82,800
$86,976
$248,400
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.