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. Each handisaw sells for $40. Wesley expects the following unit sales:

January 2,100 February 2,300 March 2,800 April 3,000 May 2,300 uary February March 1st Quarter Total Budgeted Cost of Goods Sold 2. Compute the budgeted selling and administrative expenses January ebruary March 1st Quarter Budgeted Selling and Administrative Expenses 3. Complete the budgeted income statement for the handisaw product for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.) WESLEY POWER TOOLS Budgeted Income Statement For the Quarter Ending March January February March 1st Quarter Total Budgeted Gross Profit Budgeted Net Operating Income

Explanation / Answer

Calculation of budgeted cost of goods sold January February March Total Direct material $21,000.00 $23,000.00 $28,000.00 $72,000.00 Direct Labour $8,137.50 $8,912.50 $10,850.00 $27,900.00 Variable Manufacturing Overhead $2,100.00 $2,300.00 $2,800.00 $7,200.00 Fixed Manufacturing Overhead $6,300.00 $6,900.00 $8,400.00 $21,600.00 Budgeted Cost of goods sold $37,537.50 $41,112.50 $50,050.00 $128,700.00 Budgeted Selling and administrative expenses January February March Total Selling cost (6% of sales) $5,040.00 $5,520.00 $6,720.00 $17,280.00 Fixed administrative expense $17,000.00 $17,000.00 $17,000.00 $51,000.00 Budgeted Selling and administrative expenses $22,040.00 $22,520.00 $23,720.00 $68,280.00 Wesley Power Tools Budgeted Income Statement For the Quarter ending March January February March Total Budgeted Sales $84,000.00 $92,000.00 $112,000.00 $288,000.00 Less : Budgeted Cost of goods sold $37,537.50 $41,112.50 $50,050.00 $128,700.00 Budgeted Gross Margin $46,462.50 $50,887.50 $61,950.00 $159,300.00 Less : Budgeted Selling and administrative expenses $22,040.00 $22,520.00 $23,720.00 $68,280.00 Budgeted Net Operating Income $24,422.50 $28,367.50 $38,230.00 $91,020.00

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