Trudeau Manufacturing Inc. is producing its cost of sales budget. Direct materials are budgeted to be 60% of sales value. However, due to the expansion of the company in the recent past, suppliers are giving Trudeau Manufacturing a 2% discount on all purchases of direct materials by the firm. Budgeted sales for January 2020 are expected to be $200,000 and to rise by $10,000 a month in the budget year up to December 2020. Direct labour is expected to amount to 10% of sales value and variable overhead is budgeted to be 5% of direct labour cost. What is the budgeted cost of sales (direct materials + direct labour + variable overhead) figure that will appear in the budgeted monthly statement of profit or loss for June 2020?
Trudeau Manufacturing Inc. is producing its cost of sales budget. Direct materials are budgeted to be 60% of sales value. However, due to the expansion of the company in the recent past, suppliers are giving Trudeau Manufacturing a 2% discount on all purchases of direct materials by the firm. Budgeted sales for January 2020 are expected to be $200,000 and to rise by $10,000 a month in the budget year up to December 2020. Direct labour is expected to amount to 10% of sales value and variable overhead is budgeted to be 5% of direct labour cost. What is the budgeted cost of sales (direct materials + direct labour + variable overhead) figure that will appear in the budgeted monthly statement of profit or loss for June 2020?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 11CE: Shalimar Company manufactures and sells industrial products. For next year, Shalimar has budgeted...
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Trudeau Manufacturing Inc. is producing its cost of sales budget. Direct materials are budgeted to be 60% of sales value. However, due to the expansion of the company in the recent past, suppliers are giving Trudeau Manufacturing a 2% discount on all purchases of direct materials by the firm. Budgeted sales for January 2020 are expected to be $200,000 and to rise by $10,000 a month in the budget year up to December 2020. Direct labour is expected to amount to 10% of sales value and variable overhead is budgeted to be 5% of direct labour cost. What is the budgeted cost of sales (direct materials + direct labour + variable overhead) figure that will appear in the budgeted monthly statement of profit or loss for June 2020?
$172,250
$184,500
$173,250
$176,250
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