Question

Ceder Company has compiled the following data for the upcoming year:

Sales are expected to be 15,000 units at $41.00 each.

Each unit requires 2 pounds of direct materials at $2.00 per pound.

Each unit requires 1.5 hours of direct labor at $15.00 per hour.

Manufacturing overhead is $3.00 per unit.

Beginning raw materials inventory is $3,500.00.

Ending raw materials inventory is $4,100.00.

Selling and administrative costs totaled $135,870.00.

Required:   
1. Determine Ceder's budgeted cost of goods sold.

   

	Budgeted Cost of Goods Sold

2. Complete Ceder's budgeted income statement.

	CEDER CORP. Budgeted Income Statement Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Gross Margin Budgeted Selling and Administrative Expenses Budgeted Net Operating Income

Answer 1

Solution:

1. Calculating Ceder's budgeted cost of goods sold.

Details	Amount($)
Direct labor (15,000 * 1.5 * $15)	$337,500
Direct materials   (15,000 * 2 * $2.00)	$60,000
Manufacturing overhead   (15,000 * $3.00)	$45,000
Budgeted cost of goods sold	$442,500

2. Calculating Ceder's budgeted income statement.

CEDER CORP. Budgeted Income Statement
Details	Amount($)
Budgeted Sales Revenue (15,000 * $41)	$615,000
Less: Budgeted Cost of Goods Sold	($442,500)
Budgeted Gross Margin	$172,500
Less:  Budgeted Selling and Administrative Expenses	($135,870)
Budgeted Net Operating Income	$36,630

Note:

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