Aurora Company manufactures and sells two models of watches, Polar and Universe. Itexpects to sell 3,250 units of Polar and 1,750 units of Universe in 2022. The followingestimates are given for 2022:PolarUniverse$500$200Selling priceDirect materials3070Direct labor50190Manufacturing overhead 60130Aurora had an inventory of 300 units of Polar and 115 units of Universe at the end of 2021. Ithas decided that as a measure to counter stock outages it will maintain ending inventory of400 units of Polar and 250 units of Universe.Each Universe watch requires two unit of CR01 and has to be imported at a cost of $15.There were 150 units of CR01 in stock at the end of 2021.The management does not want tohave any stock of CR01 at the end of 2022.What is the amount budgeted for purchase of CR01 in 2022? What is the amount budgeted for purchase of CR01 in 2022?A) $52,500B) $52,050C) $44,550D) $56,550

For Universe Watches:— Sales Unit = 1,750 Units of Beginning Inventory of Finished Goods = 115 Units…

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Business

Accounting

What is the amount budgeted for purchase of CR01 in 2022?

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

Budgeted Income Statement

Accounting is the process of recording business-related financial transactions. The process of accounting involves summarizing and analyzing the transactions. The financial statements which are prepared in accounting contain a summary of the various transactions that took place within a certain accounting period. Book-keeping or accounting is one of the most important activities of any business.

Question

Aurora Company manufactures and sells two models of watches, Polar and Universe. It
expects to sell 3,250 units of Polar and 1,750 units of Universe in 2022. The following
estimates are given for 2022:
Polar
Universe
$500
$200
Selling price
Direct materials
30
70
Direct labor
50
190
Manufacturing overhead 60
130
Aurora had an inventory of 300 units of Polar and 115 units of Universe at the end of 2021. It
has decided that as a measure to counter stock outages it will maintain ending inventory of
400 units of Polar and 250 units of Universe.
Each Universe watch requires two unit of CR01 and has to be imported at a cost of $15.
There were 150 units of CR01 in stock at the end of 2021.The management does not want to
have any stock of CR01 at the end of 2022.
What is the amount budgeted for purchase of CR01 in 2022?

What is the amount budgeted for purchase of CR01 in 2022?
A) $52,500
B) $52,050
C) $44,550
D) $56,550

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