Question

Country Heather manufactures flowerpots. It expects to sell 40,000 flowerpots in 2007. The company had enough beginning inventory of direct materials to produce 48,000 units. Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units. The flowerpots sell for $6.00 and the company keeps no work-in-process inventory. Direct materials costs for each flowerpot total $2.00 while direct labour is $1.00. Factory overhead is $0.40 per flowerpot.


What will be Country Heather's budgeted revenue?

		$240,000
		$216,000
		$300,500
		$312,000
		$318,000

Answer 1

solution :

given that

Country Heather manufactures flowerpots. It expects to sell 40,000 flowerpots in 2007.

The company had enough beginning inventory of direct materials to produce 48,000 units. Beginning inventory of finished units totalled 4,000 with a target ending inventory of 5,000 units.

The flowerpots sell for $6.00 and the company keeps no work-in-process inventory.

also given that

Direct materials costs for each flowerpot total $2.00

while direct labour is $1.00.

Factory overhead is $0.40 per flowerpot.

calculation of Country Heather's budgeted revenue :

budgeted revenue = 40000*6

option A

$240000