Windsor Manufacturing produces a single product and has a Just-In-Time (JIT) policy that ending inventory must equal 15% of the next month's sales. It estimates that August's ending inventory will consist of 24,000 units. September and October sales are estimated to be 160,000 and 180,000 units, respectively. Windsor assigns variable overhead at a rate of $3.50 per unit of production. Fixed overhead equals $275,000 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 September.

Windsor Manufacturing produces a single product and has a Just-In-Time (JIT) policy that ending inventory must equal 15% of the next month's sales. It estimates that August's ending inventory will consist of 24,000 units. September and October sales are estimated to be 160,000 and 180,000 units, respectively. Windsor assigns variable overhead at a rate of $3.50 per unit of production. Fixed overhead equals $275,000 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 September.

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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