The estimated purchases of raw materials would be word Company has the following budget estimates for its second year of operations:Projected sales - P3,500,000Projected net income before tax -12% of salesEstimated selling and administrative expenses - 25% of salesDirect labor and factory overhead are budgeted at 70% of the total manufacturing cost.Inventories are estimated as follows:Raw materialsGoods in processFinished goodsP250,000BeginningEndingP220,000270,000P350,000420,000300,000

Raw materials are those materials which are used directly for the production and manufacturing of…

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The estimated purchases of raw materials would be

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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Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

The estimated purchases of raw materials would be

word Company has the following budget estimates for its second year of operations:
Projected sales - P3,500,000
Projected net income before tax -12% of sales
Estimated selling and administrative expenses - 25% of sales
Direct labor and factory overhead are budgeted at 70% of the total manufacturing cost.
Inventories are estimated as follows:
Raw materials
Goods in process
Finished goods
P250,000
Beginning
Ending
P220,000
270,000
P350,000
420,000
300,000

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