Wesley power tools manufactures a wide variety of tools andaccessories. One of its more popular items is a cordless powerhandisaw. Each handisaw for $60. Wesley expects the following unitsales:
January: 5200
February: 5400
March: 5900
April: 5700
May: 5100
Wesley's ending finished goods inventory policy is 20% overthe next month sales. Suppose each handsaw takes approximately .75hours to manufacture, and Wesley pays an average labor wage of $22per hour.
Each handsaw requires a plastic housing that Wesley purchasesfrom my supplier at a cost of $7 each. The company has an endingraw materials inventory policy of 20% of the following monthsproduction requirements. Materials other than the housing unittotal of $4.50 per handisaw.
manufacturing overhead for this product includes $72,000annual fixed overhead (based on production of 27,000 units). and$1.20 per unit variable manufacturing overhead. Wesley sellingexpenses are 7% of sales dollars, and administrative expenses arefixed at $18,000 per month.
required:
1. Compute the following for the first quarter:
-budgeted sales revenue for January, February, March and firstquarter total
-budgeted production in units for January, February, March,and first quarter total
-budgeted cost of raw material purchases for the plastichousings for January, February, March, and first quartertotal
-budgeted direct labor cost for January, February, March, andfirst quarter total
