Weygandt, Financial& Hanagerial Accounting, 2e Exercise 23-10 (Part Level Submis

ID: 2586783 • Letter: W

Question

Weygandt, Financial& Hanagerial Accounting, 2e Exercise 23-10 (Part Level Submission) Lowell Company makes and sells artistic frames for pictures. The controller is information for 2017 anuary February March April Hay Estimated unit sales Sales price per unt Direct labor hours per unit wage per direct labor hour 11,900 8,600 8,700 8,300 50.50$4860 $48.60 $48.60 $48.60 1.5 1.5 $8.00 8.00 $8.00 $9.00 9.00 wage increase to $9.00 per hour on April 1. New labor-seving Lowell has a labor contract that calls for a operational by March Lowelt expects to begin the year with 14,760 frames on hand and has a policy of carrying an end-of-month machinery has been instaled and will be fuly 40% of the second folowing invernry of 100% ofthe folewig month- month's sales. (a) Prepare a production budget for Lowell Company by month and for the first quarter of the year LOWELL COMPANY

Explanation / Answer

Production Budget

January

February

March

Total

Estimated sale

10000

11900

8600

30500

Ending inventory

15340

12080

12020

39440

Total production needed

25340

23980

20620

69940

Less: Beginning inventory

(14760)

(15340)

(12080)

(42180)

Required production (In units)

10580

8640

8540

27760

Working Note;

Ending inventory is calculated as follow;

For January;

11900 + (8600 * .40)

11900 + 3440 = 15340 Units

For February;

8600 + (8700 * .40)

8600 + 3480 = 12080 Units

For March;

8700 + (8300 * .40)

8700 + 3320 = 12020 Units