Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $46. Wesley expects the following unit sales: January 3,800 February 4,000 March 4,500 April 4,300 May 3,700
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $46. Wesley expects the following unit sales:
| January | 3,800 |
| February | 4,000 |
| March | 4,500 |
| April | 4,300 |
| May | 3,700 |
Wesley’s ending finished goods inventory policy is 25 percent of the next month’s sales.
Suppose each handisaw takes approximately 0.60 hours to manufacture, and Wesley pays an average labor wage of $22 per hour.
Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending direct materials inventory policy of 20 percent of the following month’s production requirements. Materials other than the housing unit total $4.50 per handisaw.
Manufacturing
Required:
Compute the following for the first quarter (Jan, Feb and Mar)
- Budgeted Production in Units
- Budgeted Cost of Direct Materials Purchases for the Plastic Housings
- Budgeted Direct Labor Cost
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