Question

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020. Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour January 10,400 $50.90 2.2 $8 February 11,500 $48.30 2.2 $8 March 8,900 $48.30 1.5 $8 April 8,700 $48.30 1.5 $9 May 8,500 $48.30 1.5 $9 pe he Lowell has a labor contract that calls for a wage increase to $9 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 16,150 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 50% of the second following month's sales. ects Your answer is partially correct. Try again. Prepare a production budget for Lowell Company by month and for the first quarter of the year. LOWELL COMPANY Production Budget rod Jan Feb Mar Total TExpected Unit Sales 10400 11500 18900 Todd Desired Ending Finished Goods Unit Total Required Units

Answer 1

Solution:

P R S 51 52 Lowell company 53 54 Production Budget 55 February March January Quarter Estimated unit sales 10400 56 11500 8900 30800 Add: Desired Ending finished goods Total Requiredments Less:Beginning finished goods units Production required Units 57 15950 13250 12950 12950 21850 43750 58 26350 24750 13250 59 16150 15950 16150 8600 60 10200 8800 27600 61 62 Lowell company 63 Direct labor Budget 64 65 February March January Quarter Production required Units *Direct labor hours per unit 8600 27600 66 10200 8800 67 2.2 2.2 1.5 19360 12900 68 Total Direct labor hours 22440 54700 *direct labor cost per hour 69 8 Total direct labor cost 103200 437600 70 154880 179520 71 Sheet119 (9) Sheet36 (25) Sheet161 (5) Sheet665 Sheet666 Sheet688 Sheet693 ПI