1 . |
1 . |
Sales were 20,000 units in June 2015 . Forecasted sales in units are as |
follows : July , 18,000 ; August , 22,000 ; September , 20,000 ; October , 24,000 . The | ||
sales price per unit is $ 18.00 and the total product cost is $ 14.35 per unit . | ||
2 . |
2 . |
The June 30 finished goods inventory is 16,800 units . |
3 . |
3 . |
Company policy calls for a given month ' s ending finished goods inventory |
to equal 70 % of the next month ' s expected unit sales . | ||
4 . |
4 . |
The June 30 raw materials inventory is 4,600 units . The budgeted |
September 30 raw materials inventory is 1,980 units . Raw materials cost $ 7.75 | ||
per unit . Each finished unit requires 0.50 units of raw materials . Company policy | ||
calls for a given month ’ s ending raw materials inventory to equal 20 % of the next | ||
month ’ s materials requirements . | ||
5 . |
5 . |
Each finished unit requires 0.50 hours of direct labor at a rate of $ 16 per |
hour . | ||
6 . |
6 . |
Overhead is allocated based on units of production . The predetermined |
variable overhead rate is $ 1.35 per unit produced . Depreciation of $ 20,000 per | ||
month is treated as fixed factory overhead . | ||
7 . |
7 . |
Monthly general and administrative expenses include $ 12,000 |
administrative salaries and 0.9 % monthly interest on the long-term note payable . | ||
8 . |
8 . |
Sales commissions are 12 % of sales and are paid in the month of the |
sales . The sales manager ’ s monthly salary is $ 3,750 per month . The following | ||
critical elements must be addressed by completing the budget templates found | ||
on the “ Budgets ” tab . | ||