Howard Temple, Ic., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2020: Beginning Inventory Ending Inventory Direct materials 24,000 units 24,000 units Work-in-Process Inventory 0 units O units Finished Goods Inventory 2,000 units 2,500 units On the 2020 budgeted income statement, what amount will be reported for sales? $246,000 $240,000 $312.000 $318.000
Howard Temple, Ic., expects to sell 20,000 pool cues for $12.00 each. Direct materials costs are $2.00, direct manufacturing labor is $4.00, and manufacturing overhead is $0.80 per pool cue. The following inventory levels apply to 2020: Beginning Inventory Ending Inventory Direct materials 24,000 units 24,000 units Work-in-Process Inventory 0 units O units Finished Goods Inventory 2,000 units 2,500 units On the 2020 budgeted income statement, what amount will be reported for sales? $246,000 $240,000 $312.000 $318.000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:**Howard Temple, Inc. Sales Forecast and Inventory Analysis for 2020**
**Overview:**
Howard Temple, Inc. plans to sell 20,000 pool cues at a price of $12.00 each. The cost breakdown includes:
- Direct materials: $2.00 per cue
- Direct labor: $4.00 per cue
- Manufacturing overhead: $0.80 per cue
**Inventory Levels for 2020:**
| Inventory Type | Beginning Inventory | Ending Inventory |
|------------------------------|---------------------|------------------|
| Direct Materials | 24,000 units | 24,000 units |
| Work-in-Process Inventory | 0 units | 0 units |
| Finished Goods Inventory | 2,000 units | 2,500 units |
**Sales Question:**
On the 2020 budgeted income statement, what amount will be reported for sales?
- $246,000
- $240,000
- $312,000
- $318,000
**Explanation:**
To calculate the sales amount, multiply the expected number of units sold (20,000) by the selling price per unit ($12.00). This results in a total sales amount of $240,000.
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