80.2K

Verified Solution

Link Copied!

Choo-Foo Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020:

		January		February		March		April		May
Estimated unit sales		11,000		11,000		8,000		10,000		8,000
Sales price per unit		$55.00		$52.30		$52.30		$52.30		$52.30
Direct labour hours per unit		2.0		2.0		1.5		1.5		1.5
Wage per direct labour hour		$8.00		$8.00		$8.00		$9.00		$9.00

Choo-Foo has a labour contract that calls for a wage increase to $9.00 per hour on April 1. It has installed new labour-saving machinery, which will be fully operational by March 1. Choo-Foo expects to begin the year with 15,000 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following months sales, plus 50% of the next months sales. (a) Prepare a production budget and a direct labour budget for Choo-Foo by month and for the first quarter of the year. The direct labour budget should include direct labour hours and show the detail for each direct labour cost category. (Round DLH per unit to 1 decimal places, e.g. 1.2, labor rate per hour to 2 decimal places, e.g. 12.25 and all other answers to 0 decimal places, e.g. 125.)

CHOO-FOO COMPANY Production Budget For the quarter ending March 31, 2020
		Jan		Feb		Mar		Total
Total requiredEnding InventoryBegining inventoryEstimated unit sales
AddLess: Total requiredBegining inventoryEnding InventoryEstimated unit sales
Ending InventoryTotal requiredBegining inventoryEstimated unit sales
AddLess: Ending InventoryEstimated unit salesTotal requiredBegining inventory
Total

CHOO-FOO COMPANY Direct Labour Budget For the quarter ending March 31, 2020
		Jan		Feb		Mar		Total
DLH per unitProduction in unitsRate per hourTotal hours required
Production in unitsRate per hourTotal hours requiredDLH per unit
Production in unitsRate per hourDLH per unitTotal hours required
Production in unitsTotal hours requiredRate per hourDLH per unit
Total		$		$		$		$

Answer & Explanation Solved by verified expert

See Answer