In: Accounting
No explanation needed.
Inc. makes and sells a single snowboard model, the Titan. Fullerton’s CEO expects to sell 3,910 snowboards at an estimated retail price of $1,320 per board during 2018. In the fall of 2017, Fullerton gathered the following data to prepare budgets for 2018:
Materials and Labor Requirements |
|
Wood |
17 board feet (b.f.) per snowboard |
Fiberglass |
15 yards per snowboard |
Direct labor |
7 hours per snowboard |
CEO expects to sell 3,910 snowboards during 2018 at an estimated retail price of
$ 1,320 per board. Further, the CEO expects 2018 beginning inventory of 700 snowboards and would like to end 2018 with 900 snowboards in stock. The inventoriable unit cost for beginning finished goods inventory on January 1, 2018 is $230.00.
Data pertaining to the direct materials inventories are as follows:
Beginning Inventory |
Ending Inventory |
|
Wood |
2,100 b.f. |
1,600 b.f. |
Fiberglass |
1,100 yards |
2,100 yards |
Variable manufacturing overhead is $20 per direct labor-hour. There are also $28,770 in fixed manufacturing overhead cots budgeted for 2018. Both variable and fixed overhead costs are allocated based on direct manufacturing labor-hours.
Other data include the following:
2017 Unit Price |
2018 Unit Price |
|
Wood |
$38.00 per b.f. |
$40.00 per b.f. |
Fiberglass |
$14 per yard |
$15 per yard |
Direct labor |
$34.00 per hour |
$35.00 per hour |
1.What is the total direct manufacturing labor costs budget?
Group of answer choices
$1,006,950
$882,980
$908,950
$978,180
2.What are total manufacturing overhead costs?
Group of answer choices
$604,170
$548,170
$110,970
$102,970
3.What is the cost of target ending inventories of finished goods?
Group of answer choices
$965,200
$1,167,300
$978,300
$1,116,900
4.What is the budgeted cost of goods sold for 2018?
Group of answer choices
$4,369,470
$4,508,070
$4,319,070
$4,521,170
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Inc. makes | ||
Production Budget | Note | |
Sales (units) | 3,910.00 | A |
Add: Desired Ending Inventory | 900.00 | B |
Total needed | 4,810.00 | C=A+B |
Less: Expected Beginning Inventory | 700.00 | D |
Production Budget | 4,110.00 | E=C-D |
Ans 1 - Direct Labor Budget | Amount $ | |
Production Budget | 4,110.00 | See E |
Labor hour required per unit | 7.00 | F |
Labor hour needed for production | 28,770.00 | G=F*E |
Labor rate per hour | 35.00 | H |
Direct Labor Budget | 1,006,950.00 | I=G*H |
Ans 2 - Manufacturing overhead costs | Amount $ | |
Labor hour needed for production | 28,770.00 | See G |
Variable Overhead rate per hour | 20.00 | J |
Variable Overhead Budget | 575,400.00 | K=G*J |
Fixed Overhead Budget | 28,770.00 | L |
Total Manufacturing overhead costs | 604,170.00 | M=K+L |
Workings for Ans 3 | Amount $ | |
Total Manufacturing overhead costs | 604,170.00 | See M |
Labor hour needed for production | 28,770.00 | See G |
Overhead absorption rate | 21.00 | N=M/G |
Ans 3- Finished goods Inventory | Wood | Fiber Glass | Labor | Overhead | Amount $ | Note |
Ending Finished goods Inventory units | 900.00 | 900.00 | 900.00 | 900.00 | O | |
Input per unit | 17.00 | 15.00 | 7.00 | 7.00 | P | |
Rate per unit of Input | 40.00 | 15.00 | 35.00 | 21.00 | Q | |
Total | 612,000.00 | 202,500.00 | 220,500.00 | 132,300.00 | 1,167,300.00 | R=O*P*Q |
Ans 4- Cost of goods sold |
$4,521,170 |