The following are budgeted data: January February March Sales in units 16,600 23,200 19,600 Production...

The following are budgeted data:

	January	February	March
Sales in units	16,600	23,200	19,600
Production in units	19,600	20,600	19,300

One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

Garrison 16e Rechecks 2017-10-03

Multiple Choice

20,925 pounds

20,575 pounds

20,275 pounds

18,325 pounds

Depasquale Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.61 direct labor-hours. The direct labor rate is $8.70 per direct labor-hour. The production budget calls for producing 6,700 units in May and 7,100 units in June. If the direct labor work force is fully adjusted to the total direct labor-hours needed each month, what would be the total combined direct labor cost for the two months?

Multiple Choice

$35,556.90

$37,679.70

$36,618.30

$73,236.60

Solutions

Expert Solution


Answer 1
Calculation of Purchases of raw materials for February
	February
Production in Units	20600
x Raw material required per unit (in pounds)	1
Total raw material required for production (in pounds)	20600
Add: Ending Inventory (25% of 19300 pounds)	4825
Less : Beginning Inventory (25% of 20600 pounds)	5150
Raw material purchases (in pounds)	20275
The answer is 20275 pounds

Answer 2
Calculation of the total combined direct labor cost for the two months
	May	June	Total
Production units	6700	7100
x Direct Labour hours required per unit	0.61	0.61
Total Direct Labour hours	4087	4331
x Direct Labour rate per hour	$8.70	$8.70
Direct Labour Cost	$35,556.90	$37,679.70	$73,236.60
The answer is $73,236.60

ekkarill92 answered 2 years ago

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