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 29,000 units. June and July sales are estimated to be 290,000 and 300,000 units, respectively. Trago assigns variable overhead at a rate of $2.80 per unit of production. Fixed overhead equals $410,000 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 the month of June. A. $1,222,000. B. $1,224,800. C. $1,250,000. D. $814,800.

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 29,000 units. June and July sales are estimated to be 290,000 and 300,000 units, respectively. Trago assigns variable overhead at a rate of $2.80 per unit of production. Fixed overhead equals $410,000 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 the month of June. A. $1,222,000. B. $1,224,800. C. $1,250,000. D. $814,800.

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter7: Variable Costing For Management analysis

Section: Chapter Questions

Problem 2CMA: Chassen Company, a cracker and cookie manufacturer, has the following unit costs for the month of...

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