Question

Need help answering e, f, and g

. FLEXIBLE BUDGETING AND COST OF GOODS SOLD SCHEDULES. Damp Less makes room dehumidifiers. It buys the electronic parts to make the dehumidifiers in kits, so it only purchases metal for the casings and the electronic kitted parts. Assembly is done in its one plant located in the Midwest. The company wants to put together a cost of goods sold set of budget schedules so it can plan its labor and materials purchases for the year. The data the company provides you is Sales are expected to be 5,000 units in Quarter 1, 6,000 units in Quarter 2 7,500 units in Quarter 3, and 6,000 units in Quarter 4. Quarter 1 sales for next year are expected to be 5.500 unjts. The electronics kits cost $65 each. The metal for the outside casings costs $15, Each finished goods unit uses one kit and one casing The company likes to keep 20% of the next quarter's sales on hand in fin- ished goods. It started out the year with 20% of Quarter 1's projected sales on hand. Eachunit costs $100 The company keeps 25% of its raw materials needs for the next quarter on hand at the end of each quarter. It started the year with 1,000 electronic kits and 1,200 metal casings. Costs per part are unchanged from last year . . .It takes 20 minutes to assemble a finished unit. Labor is paid $18 per hour. Overhead includes rent for the building at $5,000 per month, electricity at $1,200 per month, supervision at $4,000 per month, and general costs of $1,800 per month. Variable overhead is $8 per unit. SETTING PERFORMANCE EXPECTATIONS AT THE ENTITY LEVEL REQUIRED: For each quarter of the year, prepare: a. A production budget b. A materials budget for the two materials c. A labor budget d. An overhead budget e. A cost of goods sold budget An ending finished goods inventory budget for the year If the company considers its cost of goods sold to be 60% of sales price, what price does the company have to charge for a finished unit? g.

Answer 1

Cost of good sold budget

	Quarter 1	Quarter 2	Quarter 3	Quarter 4
Material	416000	504000	576000	472000
Labor	31194	37800	43200	35400
Variable Overhead	41600	50400	57600	47200
Total Cost	488794	592200	676800	554600
Unit produced	5200	6300	7200	5900
Unit cost	94	94	94	94
Add: opening FG	100000	112800	141000	112800
Less: Closing FG	112800	141000	112800	103400
Cost of goods Sold	475994	564000	705000	564000

Ending FG budget

	Quarter 1	Quarter 2	Quarter 3	Quarter 4
opening stock	1000	1200	1500	1200
Add: Manufacturing	5200	6300	7200	5900
Less: Sale	5000	6000	7500	6000
Closing FG	1200	1500	1200	1100
Value per unit	94	94	94	94
FG Value	112800	141000	112800	103400

g) Value per unit is 94 for unit produced during the year and 100 for opening finished goods. if the CGS is 60%, then the value will be 157 and 167 respectively for current year and old goods.