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 $50. Wesley expects the following unit sales: January 2,500 February 2,300 March 3,100 April 2,600 May 2,300 Wesley’s ending finished goods inventory policy is 35 percent of the next month’s sales. Suppose each handisaw takes approximately .35 hours to manufacture, and Wesley pays an average labor wage of $14.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw. Manufacturing overhead for this product includes $60,000 annual fixed overhead (based on production of 24,000 units) and $.90 per unit variable manufacturing overhead. Wesley’s selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $15,000 per month.

question demand: compute the budgeted cost of goods sold in the first quarter: jan feb and march

budgeted cost of goods sold

budgeted selling and administrative expenses

budgeted income statement for the quarter ending in march

Answer 1

Please hit LIKE button if this helped. For any further explanation, please put your query in comment, will get back to you.
Budgeted Cost of Goods Sold:
		Input Units	Rate	Total Cost per Unit of Handisaw
Direct Labor		0.35	$          14.50	$                                            5.08
Plastic Housing				$                                            6.00
Other Material				$                                            4.50
Variable Overheads				$                                            0.90
Fixed Overheads	60000/24000			$                                            2.50
Budgeted Cost of Goods Sold per unit	a			$                                          18.98
		Jan	Feb	March	Total
Units Sold in Q1	b	2500	2300	3100
Budgeted Cost of Goods Sold	a*b	$        47,438	$        43,643	$                                        58,823	$     149,903
Budgeted selling and Admin Expenses:
		Jan	Feb	Mar	Total
Sales Dollar		$     125,000	$     115,000	$                                      155,000	$     395,000
Variable selling and admin	6% of Sale	$          7,500	$          6,900	$                                          9,300	$        23,700
Fixed Selling and Admin		$        15,000	$        15,000	$                                        15,000	$        45,000
Budgeted selling and Admin		$        22,500	$        21,900	$                                        24,300	$        68,700
Budgeted Income Statement:
Sales Revenue			$     395,000
Less: Cost of Goods Sold			$    -149,903
Gross Margin			$     245,098
Less: Selling and Admin Expenses			$      -68,700
Net Income			$     176,398

Budgeted Income Statement:
	Jan	Feb	Mar	Total
Sales Revenue	$     125,000	$     115,000	$     155,000	$                                      395,000
Less: Cost of Goods Sold	$      -47,438	$      -43,643	$      -58,823	$                                    -149,903
Gross Margin	$       77,563	$        71,358	$        96,178	$                                      245,098
Less: Selling and Admin Expenses	$      -22,500	$      -21,900	$      -24,300	$                                       -68,700
Net Income	$       55,063	$        49,458	$        71,878	$                                      176,398