Answered: 1. Determine Galactic's budgeted…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Galactic Inc. manufactures flying drone toys. Sales units for January, February, March, April and May were 680, 660, 732, 692, and 760 respectively. Each unit requires 3 direct labor hours and Galactic’s hourly labor rate is $34 per hour. The company’s variable overhead is $23 per unit produced and its fixed overhead is $7,400 per month. Use the information presented to complete the requirements. The drone toy includes 3 LED lights, which cost $15 each.

Required:

1. Determine Galactic's budgeted manufacturing cost per drone. (Note: assume that fixed overhead per unit is $27.25.)

2. Determine Galactic's budgeted cost of goods sold for January and February.

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