Question

Soputan Design produces and sells two types of office desk: Standard and Exclusive desk. The budgeted direct costs for each of the product in 2019 are as follows:

Information regarding the direct materials for March 2019 is available below.

	Standard	Exclusive
Wood A	2 square metres	0
Wood B	0	5 square metres
Stand A	4 units	0
Stand B	0	4
Direct Labour	3 hours	5 hours

Actual beginning Direct material inventory (1‐March‐2019)
Wood A	40 square metres
Wood B	30 square metres
Stand A	100 units
Stand B	40 units
Target ending Direct material inventory (31‐March‐2019)
Wood A	24 square metres
Wood B	40 square metres
Stand A	80 units
Stand B	44 units

Information regarding the unit cost of direct costs for February and March 2019 are as follows:

It should be noted that manufacturing overhead (both fixed and variable) is allocated to each product base on budgeted direct manufacturing labour‐hours per product. The budgeted variable manufacturing overhead rate for March 2019 is $35 per direct manufacturing labour‐hour. The budgeted fixed manufacturing overhead for March 2019 is $42 500. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. The following data is related to finished goods inventory for March 2019:

	February 2019	March 2019
Wood A per square metre	$ 144.00	$ 160.00
Wood B per square metre	$ 115.00	$ 125.00
Stand A per unit	$ 11.00	$ 12.00
Stand B per unit	$ 17.00	$ 18.00
Direct Labour cost per hour	$ 30.00	$ 30.00

	Standard	Exclusive
Beginning inventory units	20	5
Beginning inventory in $	$10,480	$4,850
Target ending inventory in units	30	15

Budgeted sales for March 2019 are 740 units of the standard and 390 units of the Exclusive. The budgeted selling prices per unit in March 2019 are $1,020 for the standard desk and $1,600 for the exclusive desk. Assume that the following in your answer:

There is no work‐in‐process inventory at the end of each month.

Direct materials inventory and finished goods inventory uses the First In First Out method (the first

in cost per unit of the material is firstly charged into production) to determine the production cost.

Unit costs of direct materials purchased and finished goods are constant in March 2019.

Prepare the following budgets for March 2019 in tabular format (show all workings):

Marks

1 Sales budget 10

2 Production budget. 10

3 Direct materials usage budget in units and dollars 20

4 Direct manufacturing labour budget 10

5 Manufacturing overhead budget, and Manufacturing overhead rate per hour 20

6 Calculate ending inventory budget of Finished goods. 20

7 Cost of goods sold budget 10

can you please post Answers for Q5-7 please and thankyou

Answer 1

5	Manufacturing Overhead Budget
		Standard	Exclusive
	Budgeted Sales	740	390
	Add: Target Ending inventory	30	15
	Less: Beginning Inventory	20	5
	Budgeted Production required	750	400
	Direct labour for one unit	3	5
	Direct labor required	2250	2000
	Variable manufacturing overhead rate per hour	$35	$35
	Budgeted variable manufacturing overheads	$78,750	$70,000
	Fixed manufacturing overhead rate per hour	$10	$10
	Budgeted fixed manufacturing overheads	$22,500	$20,000
	Fixed Overheads	$42,500
	Total labor hour required (2250+2000)	4250
	Fixed overhead rate per hour	$10
6	Ending Inventory Budget of Finished Goods
		Standard	Exclusive
	Ending Inventory of Finished Goods	30	15
	Direct Material
	Wood A (30 x 2 sq mt x $160)	$9,600
	Wood B (15 x 5 sq mt x $125)		$9,375
	Stand A (30 x 4 x 12)	$1,440
	Stand B (15 x 4 x 18)		$1,080
	Direct Labor
	(30 x 3 x 30)	$2,700
	(15 x 5 x 30)		$2,250
	Variable manufacturing overheads
	(30 x 3 x $35)	$3,150
	(15 x 5 x $35)		$2,625
	Fixed Manufacturing overheads
	(30 x 3 x $10)	$900
	(15 x 5 x $10)		$750
	Total cost	$17,790	$16,080
7	Cost of Goods sold Budget
		Standard	Exclusive
	Budgeted Sales	740	390
	Beginning Inventory	20	5
	Beginning Inventory cost	$10,480	$4,850
	Remaining unit	720	385
	Direct Material
	Wood A(20 x 2 x $144)	$5,760
	Wood A(700 x 2 x $160)	$224,000
	Wood B(6 x 5 x$115)		$3,450
	Wood B(379 x 5 x $125)		$236,875
	Stand A(25 x 4 x $11)	$1,100
	Stand A(695 x 4 x $12)	$33,360
	Stand B(10x4x$17)		$680
	Stand B(375x4x$18)		$27,000
	Direct Material cost	$264,220	$268,005
	Direct labor
	(720 x 3 x $30)	$64,800
	(385 x 5 x $30)		$57,750
	Variable manufacturing overheads
	(720 x 3 x $35)	$75,600
	(385 x 5 x $35)		$67,375
	Fixed Manufacturing overheads
	(720 x 3 x $10)	$21,600
	(385 x 5 x $10)		$19,250
	Total Cost of goods sold	$436,700	$417,230