Question

Ceder Company has compiled the following data for the upcoming year: • Sales are expected to be 13,000 units at $47.00 each. • Each unit requires 3 pounds of direct materials at $2.30 per pound • Each unit requires 1.8 hours of direct labor at $14.00 per hour. • Manufacturing overhead is $3.30 per unit. • Beginning raw materials inventory is $3,800.00 • Ending raw materials inventory is $4,550.00. • Selling and administrative costs totaled $136,320. Required: 1. Determine Ceder's budgeted cost of goods sold. (Do not round the intermediate values.) Budgeted Cost of Goods Sold 2. Complete Ceder's budgeted income statement. (Do not round the intermediate values.) CEDER CORP. Budgeted Income Statement Budgeted Gross Margin Budgeted Net Operating Income

Answer 1

CEDER CORP.
Budgeted Income Statement
Budgeted Sales Revenue             [Units sold x Selling price per unit = 13,000 units x $47]	$611,000
Budgeted Cost of Goods Sold    [Refer working note]	$460,200
Budgeted Gross Margin            [Sales - Cost of Goods sold]	$150,800
Budgeted Selling and Administrative Expenses	$136,320
Budgeted Net Operating Income        [Gross margin - Selling and Administrative Expenses]	$14,480

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Working note - Computation of cost of goods sold
Direct material cost per unit                  (3 pounds x $2.30 per pound)	$6.90
Direct labor cost per unit                       (1.8 hours x $14 per hour)	$25.20
Manufacturing overhead cost per unit	$3.30
Cost per unit                    (a)	$35.40
Units sold                           (b)	13000
Cost of goods sold              (a x b)	$460,200