Question

I am stuck on question 7 and 8 - Budget Finished goods inventory and cost of goods sold

The SmartProduct Corporation manufactures and sells three products: ExcelWidget, GoodWidget, and FairWidget. In June 2020, SmartProduct’s Budget Department gathered the following data in order to prepare budgets for 2021:

2021 Projected Sales

Product	Units	Price
ExcelWidget	32,000	$270
GoodWidget	28,000	$190
FairWidget	65,000	$145

Expected Target Inventories

Product	January 1, 2021	December 31, 2021
ExcelWidget	24,000	27,000
GoodWidget	15,000	20,000
FairWidget	17,000	14,000

The following direct materials are expected to be used in the three products:                                                                                               

		Amount Used                                                                                                      Per Unit
Direct Material	Unit	ExcelWidget	GoodWidget	FairWidget
X1	pound	6	4	1
X2	pound	3	2	3

Projected data for 2021 with respect to direct materials are as follows:                                        

Direct Materials	Expected Purchase Price	Expected Inventories (January 1, 2021)	Target Inventories (December 31, 2021)
X1	$16	64,000 lb	51,000 lb
X2	$12	86,000 lb	64,000 lb

Projected direct manufacturing labor requirements and rates for 2021 are as follows:

Product	Hours Per Unit	Rate Per Hour
ExcelWidget	3.5	$14
GoodWidget	3	$13
FairWidget	2.5	$9

Manufacturing overhead is allocated at the rate of $15 per direct manufacturing labor-hour.

Required: Based on the preceding projections and budget requirements for ExcelWidget, GoodWidget, and FairWidget, prepare the following budgets for SmartProduct for 2021. Show breakups where appropriate.

1. Revenues budget (in dollars)
2. Production budget (in units)
3. Direct Materials purchases budget (in quantities)
4. Direct Materials purchases budget (in dollars)
5. Manufacturing Direct Labor budget (in dollars)
6. Manufacturing Overhead budget (in dollars)
7. Budgeted Finished Goods inventory (in dollars)
8. Cost of Goods Sold budget (in dollars)                            

Answer 1