Exercise 8.6 Ending Finished Goods Inventory Budget CORNERSTON E 8.6 Play Disc m

Question

Exercise 8.6 Ending Finished Goods Inventory Budget CORNERSTON E 8.6 Play Disc makes Frisbee-type plastic dises. Each 12-inch diameter plastic disc has the Direct materials Direct labor Variable overhead Fixed overbead 1.67 0.56 0.72 Total unit cost For the coming year, Play-Disc expects to make 300,000 plastic dises, and to sell 285, of them. Budgeted beginning inventory in units is 16.000 with unit cost of $4.75. (There are no beginning or ending inventories of work in process.) Required: 1. Prepare an ending finished goods inventory budget for Play-Dise for the coming year. Haar grsales increased to 290,000 discs? How would that a meet the ending finished goods in ventory budget? Calculate the value of budgeted 2. ending finished goods inventory OBJECTIVE Cornerstone Exercise 8.7 Cost of Goods Sold Budget ERSTONE 8.7 Refer to Cornerstone Exercise 8.6 Required I. Calculate the total budgeted cost of units produced for Play-Disc for the coming year. Show the cost of direct materials, direct labor, and overhead. Prepare a cost of goods sold budget for Play-Dise for the year. WAatifthe beginning inventory offinished goods was S75.200 (for 16,000 units)? How would that affect the cost of goods sold budget? (Assume Play-Dise uses the FIFO method.) 2. 3

Explanation / Answer

Solution 8.7 - 1:

Solution 2:

Solution 3:

Play Disc - Computation of Budgeted cost of units produced Particulars Amount Direct Material (300000*1.67) $501,000.00 Direct Labor (300000*0.56) $168,000.00 Variable Overhead (300000*0.72) $216,000.00 Fixed Overhead (300000*1.80) $540,000.00 Total Budgeted cost of unit produced $1,425,000.00

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