1. Compute the budgeted cost of goods sold for the first quarter.
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales:
| January | 2,200 |
| February | 2,500 |
| March | 3,100 |
| April | 2,600 |
| May | 2,100 |
Wesley’s ending finished goods inventory policy is 35 percent of the next month’s sales.
Suppose each handisaw takes approximately 0.55 hours to manufacture, and Wesley pays an average labor wage of $14.50 per hour.
Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $7.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month’s production requirements. Materials other than the housing unit total $4.00 per handisaw.
Manufacturing
Required:
1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the
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