Preparing a Cost of Goods Sold Budget Andrews Company manufactures a line of office chairs. Each chair takes $20 of direct materials and uses 1.9 direct labor hours at $20 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.80 per direct labor hour. Andrews Company expects to produce 20,000 chairs next year and expects to have 760 chairs in ending inventory. There is no beginning inventory of chairs. Required: Prepare a cost of goods sold budget for Andrews Company. Round your answers to the nearest dollar.
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Preparing a Cost of Goods Sold Budget
Andrews Company manufactures a line of office chairs. Each chair takes $20 of direct materials and uses 1.9 direct labor hours at $20 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour, and the fixed overhead rate is $1.80 per direct labor hour. Andrews Company expects to produce 20,000 chairs next year and expects to have 760 chairs in ending inventory. There is no beginning inventory of chairs.
Required:
Prepare a cost of goods sold budget for Andrews Company. Round your answers to the nearest dollar.
| Andrews Company | |
| Cost of Goods Sold Budget | |
| For the Coming Year | |
| $fill in the blank 2 | |
| fill in the blank 4 | |
| fill in the blank 6 | |
| fill in the blank 8 | |
| $fill in the blank 10 | |
| fill in the blank 12 | |
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
