Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 28,200 units. June and July sales are estimated to be 282,000 and 292,000 units, respectively. Trago assigns variable overhead at a rate of $2.00 per unit of production. Fixed overhead equals $402,000 per month. Compute the number of units to be produced and use this amount to compute the total budgeted overhead that would appear on the factory overhead budget for month of June. a. $966,000 b. $968,000 c. $566,000 d. $978,000 e. $986,000

Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 28,200 units. June and July sales are estimated to be 282,000 and 292,000 units, respectively. Trago assigns variable overhead at a rate of $2.00 per unit of production. Fixed overhead equals $402,000 per month. Compute the number of units to be produced and use this amount to compute the total budgeted overhead that would appear on the factory overhead budget for month of June. a. $966,000 b. $968,000 c. $566,000 d. $978,000 e. $986,000

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter7: The Master Budget And Flexible Budgeting

Section: Chapter Questions

Problem 23Q: If a factory operates at 100% of capacity one month, 90% of capacity the next month, and 105% of...

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