Grady manufactures medical supply kits. Projected production for the first months of production are (hint: no beginning inventory for October): Oct production 21,000 Nov production 24,000 There are four materials per kit at a cost of $1.67 each. The company desires to have enough materials on hand at month end to supply 20% of next month's production. Payments for material purchases are made 50% in the month purchased and the rest in the next month. Each kit uses 0.75 hours of direct labor at $15.00 per hour, payable in the month worked. Indirect costs are fixed per month at $81,000 and includes $20,000 of depreciation, and are payable in the month incurred. What should they budget for cash payments for production costs in October?
Grady manufactures medical supply kits. Projected production for the first months of production are (hint: no beginning inventory for October): Oct production 21,000 Nov production 24,000 There are four materials per kit at a cost of $1.67 each. The company desires to have enough materials on hand at month end to supply 20% of next month's production. Payments for material purchases are made 50% in the month purchased and the rest in the next month. Each kit uses 0.75 hours of direct labor at $15.00 per hour, payable in the month worked. Indirect costs are fixed per month at $81,000 and includes $20,000 of depreciation, and are payable in the month incurred. What should they budget for cash payments for production costs in October?
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Grady manufactures medical supply kits. Projected production for the first months of production are
(hint: no beginning inventory for October):
Oct production 21,000
Nov production 24,000
There are four materials per kit at a cost of $1.67 each. The company desires to have enough
materials on hand at month end to supply 20% of next month's production. Payments for material
purchases are made 50% in the month purchased and the rest in the next month.
Each kit uses 0.75 hours of direct labor at $15.00 per hour, payable in the month worked. Indirect
costs are fixed per month at $81,000 and includes $20,000 of depreciation, and are payable in the
month incurred.
What should they budget for cash payments for production costs in October?
Enter as a whole number, no commas and no dollar signs.
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