P6.3 (LO 1, 2, 3), AP Excel Lavish Towel Company completely stocked out of its cotton yarn for making towels in April (last month). So management is starting over, trying to build up an inventory of yarn while ensuring there is enough yarn on hand for the production group to catch up with orders. Phyllis is responsible for putting all operating budgets together to estimate operating income for May. Here is the information she has. Additional information: May June July Budgeted sales in units 6,000 6,200 5,800 Budgeted selling price Target ending FG Inventory Beginning FG Inventory Target ending DM Inventory Beginning DM Inventory Budgeted DM usage and cost Budgeted DL usage and cost Budgeted variable-MOH costs Budgeted fixed-MOH costs Budgeted variable SG&A costs Budgeted fixed SG&A costs $6 per unit 15% of next month's sales volume 300 units, at a total cost of $1,170 (based on prior period costs] 20% of next month's production needs 0 25 yards per unit at a cost of $0.04 per yard 0.1 DL hours per unit at a cost of $15 per hour $0.50 per unit $6,000 total (including $500 of depreciation) $0.40 per unit sold $7,000 total (including $800 of depreciation)
P6.3 (LO 1, 2, 3), AP Excel Lavish Towel Company completely stocked out of its cotton yarn for making towels in April (last month). So management is starting over, trying to build up an inventory of yarn while ensuring there is enough yarn on hand for the production group to catch up with orders. Phyllis is responsible for putting all operating budgets together to estimate operating income for May. Here is the information she has. Additional information: May June July Budgeted sales in units 6,000 6,200 5,800 Budgeted selling price Target ending FG Inventory Beginning FG Inventory Target ending DM Inventory Beginning DM Inventory Budgeted DM usage and cost Budgeted DL usage and cost Budgeted variable-MOH costs Budgeted fixed-MOH costs Budgeted variable SG&A costs Budgeted fixed SG&A costs $6 per unit 15% of next month's sales volume 300 units, at a total cost of $1,170 (based on prior period costs] 20% of next month's production needs 0 25 yards per unit at a cost of $0.04 per yard 0.1 DL hours per unit at a cost of $15 per hour $0.50 per unit $6,000 total (including $500 of depreciation) $0.40 per unit sold $7,000 total (including $800 of depreciation)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Fill out a DL Budget, MOH Budget, and SG&A budget
![P6.3 (LO 1, 2, 3), AP Excel Lavish Towel Company completely stocked out of its cotton yarn for making towels in April (last month). So management is starting over, trying to
build up an inventory of yarn while ensuring there is enough yarn on hand for the production group to catch up with orders. Phyllis is responsible for putting all operating
budgets together to estimate operating income for May. Here is the information she has.
Additional information:
May June July
Budgeted sales in units 6,000 6,200 5,800
Budgeted selling price
Target ending FG Inventory
Beginning FG Inventory
Target ending DM Inventory
Beginning DM Inventory
Budgeted DM usage and cost
Budgeted DL usage and cost
Budgeted variable-MOH costs
Budgeted fixed-MOH costs
Budgeted variable SG&A costs
Budgeted fixed SG&A costs
$6 per unit
15% of next month's sales volume
300 units, at a total cost of $1,170 (based on prior period costs]
20% of next month's production needs
0
25 yards per unit at a cost of $0.04 per yard
0.1 DL hours per unit at a cost of $15 per hour
$0.50 per unit
$6,000 total (including $500 of depreciation)
$0.40 per unit sold
$7,000 total (including $800 of depreciation)](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3aff2365-9f44-4770-b8e3-e2ed0988bbf7%2Fe4ea4118-d81a-4a4c-8b90-2b38c3b10251%2Fd7t3e2x_processed.png&w=3840&q=75)
Transcribed Image Text:P6.3 (LO 1, 2, 3), AP Excel Lavish Towel Company completely stocked out of its cotton yarn for making towels in April (last month). So management is starting over, trying to
build up an inventory of yarn while ensuring there is enough yarn on hand for the production group to catch up with orders. Phyllis is responsible for putting all operating
budgets together to estimate operating income for May. Here is the information she has.
Additional information:
May June July
Budgeted sales in units 6,000 6,200 5,800
Budgeted selling price
Target ending FG Inventory
Beginning FG Inventory
Target ending DM Inventory
Beginning DM Inventory
Budgeted DM usage and cost
Budgeted DL usage and cost
Budgeted variable-MOH costs
Budgeted fixed-MOH costs
Budgeted variable SG&A costs
Budgeted fixed SG&A costs
$6 per unit
15% of next month's sales volume
300 units, at a total cost of $1,170 (based on prior period costs]
20% of next month's production needs
0
25 yards per unit at a cost of $0.04 per yard
0.1 DL hours per unit at a cost of $15 per hour
$0.50 per unit
$6,000 total (including $500 of depreciation)
$0.40 per unit sold
$7,000 total (including $800 of depreciation)
Transcribed Image Text:4. DL budget.
5. MOH budget.
6. SG&A budget.
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