Question
In: Accounting
First Class, Inc., expects to sell 29,000 pool cues for $13 each. Direct materials costs are...
First Class, Inc., expects to sell 29,000 pool cues for $13
each. Direct materials costs are $3, direct manufacturing labor is
$5, and manufacturing overhead is $0.83 per pool cue. The following
inventory levels apply to 2019:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process inventory 0 units 0 units
Finished goods inventory 1,200 units 2,800 units
What are the 2019 budgeted costs for direct materials, direct
manufacturing labor, and manufacturing overhead,
respectively?
Solutions
Expert Solution
DETAILS GIVEN IN QUESTION:
SALE UNITS = 29000 POOL CUES
SELL PRICE = $13 each.
Direct materials costs = $3 per pool cue
Direct manufacturing labor = $5 per pool cue
Manufacturing overhead = $0.83 per pool cue.
Inventory levels of 2019:
Beginning inventory Ending inventory
Direct materials 24,000 units 24,000 units
Work-in-process 0 units 0 units
Finished goods 1,200 units 2,800 units
FIND 2019 budgeted costs.
ANSWER:
a. PRODUCTION BUDGET FOR 2019
| PARTICULARS | UNITS |
| SALES | 29,000 |
| (+) CLOSING INVENTORY OF FINISHED GOODS | 2,800 |
| (-) OPENING INVENTORY OF FINISHED GOODS | (1,200) |
| PRODUCTION | 30,600 |
b. DIRECT MATERIAL PURCHASED:
| PARTICULARS | UNITS |
| CONSUMPTION (same as PRODUCTION ) | 30,600 |
| (+) CLOSING INVENTORY OF DIRECT MATERIAL | 24,000 |
| (-) OPENING INVENTORY OF DIRECT MATERIAL | (24,000) |
| PURCHASE OF DIRECT MATERIAL | 30,600 |
HENCE, 2019 Budgeted costs.
(i) DIRECT MATERIAL = PURCHASE UNITS x PRICE PER UNIT = 30,600 x $ 3 = $ 91,800
(ii) DIRECT MANUFACTURING LABOR = PRODUCTION UNITS x COST PER UNIT = 30,600 x $ 5 = $ 153,000
(iii) MANUFACTURING OVERHEAD = PRODUCTION UNITS x COST PER UNIT = 30,600 x $ 0.83 = $ 25,398
ekkarill92 answered 2 years agoRelated Solutions
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