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Sales through the first three months of the current year wer

Paper help Economics Sales through the first three months of the current year wer

Economics

Sales through the first three months of the current year wer

Sales through the first three months of the current year were 30,000 units. Actual sales in… Show more Sales: Sales through the first three months of the current year were 30,000 units. Actual sales in units for January, February, and March, and planned sales in units over the next five months, are given below: January (actual) 6,000 February (actual) 10,000 March (actual) 14,000 April (planned) 20,000 May (planned) 35,000 June (planned) 50,000 July (planned) 45,000 August (planned) 30,000 In total, expects to produce and sell 250,000 units during the current year. Direct Material: Two different materials are used in production of the component. Data regarding these materials are given below: Units of Direct Cost Direct Materials per per Inventory at Material Finished Component lb/ft March 31 No. 208 4 pounds $5.00 46,000 pounds No. 311 9 feet 2.00 69,000 feet Material No. 208 is sometimes in short supply. Therefore, the East Division requires that enough of the material be on hand at the end of each month to provide for 50% of the following month%u2019s production needs. Material No. 311 is easier to get, so only one-third of the following month%u2019s production needs must be on hand at the end of each month. Direct Labor: The East Division has three department through which the components must past before they are completed. Information relating to direct labor in these departments is given below: Direct Labor-Hours Cost per Per Finished Direct Department Component Labor-Hour Shaping .25 $18.00 Assembly .70 16.00 Finishing .10 20.00 Direct labor is adjusted to the workload each month. Manufacturing Overhead: East Division manufactured 32,000 components during the first three months of the current year. The actual variable overhead costs incurred during this three-month period are shown below. Each Division%u2019s controller believes that the variable overhead costs incurred during the last nine months of the year will be at the same rate per component as experienced during the first three months. Utilities $ 57,000 Indirect Labor 31,000 Supplies 16,000 Other 8,000 Total variable overhead $112,000 The actual fixed manufacturing overhead costs incurred during the first three months amounted to $1,170,000. The East Division has planned fixed manufacturing overhead costs for the entire year as follows: Supervision $ 872,000 Property Taxes 143,000 Depreciation 2,910,000 Insurance 631,000 Other 72,000 Total fixed manufacturing Overhead $4,628,000 Finished Goods Inventory: The desired monthly ending inventory of completed components is 20% of the next month%u2019s estimated sales. The East Division has 4,000 units in the finished goods inventory on March 31. Selling and Administrative Expenses: Selling and Administrative Expenses are budgeted at $400,000 per month plus 1% of total credit sales for the month. • Show less

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