Question

Wesley power tools

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power and saw. Each handisaw sells for $48. Wesley expects the following unit sales January February March April 4.000 4,200 4,700 Mary 3,900 Wesley's ending finished goods inventory policy is 20 rcent of the next month's sales. Suppose each handisaw takes approximately 0.75 to manufacture, and Wesley pays an average labor wage of $24 per hour Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 25 percent of the following month's production requirements. Materials other than the housing unit total $450 per handisaw Manufacturing overhead for this product includes $72.000 annual fixed overhead (based on production of 27,000 units) and $120 per unit variable manufacturing overhead Wesley's se elling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $18,000 per month Required: Compute the following for the medial calculations to nearest whole dollar.) January February March 1st Quarter total 1. Budgeted Sales Revenue 2. Budgeted Production in Units 3. Budgeted Cost of Direct Materials 4 Budgeted Direct Labor Cost

Answer 1

Wesley Power Tools Budgeted Sales Revenue Units Selling Price Total Sales January February March 4000 4200 4700 48 48 48 192000 201600 225600 1st Quarter 1 2900 48 619200 4000 Budgeted Production in Units January February March Units 4200 4700 Ending Inventory 840 940 900 4840 5140 5600 Opening Inventory -800 -840 -940 Production 4040 4300 4660 1st Quarter 12900 900 13800 -800 13000 April 4500 780 5280 -900 4380 Budgeted cost of Direct Material Purchases January February March Production 4040 4300 4660 Ending Inventory 1075 1165 1095 5115 5465 5755 Opening Inventory -1010 -1075 -1165 4105 4390 4590 Cost per handisaw 10.5 10.5 10.5 Cost pf Raw material 43103 46095 48195 1st Quarter 13000 1095 14095 -1010 13085 10.5 137393 Direct Labour Budget Production Direct Labour Required Total Hours required Direct Labour cost per hour Total Labour Cost January February March 4040 4300 4660 0.75 0.75 0.75 3030 3225 3495 24 72720 7740083880 1st Quarter 13000 0.75 9750 24 234000 24

1 Wesley Power Tools 3 Budgeted Sales Revenue 4 February 1st Quarter =SUM(B5:05) 4200 5 Units 6 Selling Price 7 Total Sales January 4000 48 =B5%B6 March 4700 48 =D5*D6 48 48 =C5*C6 =E5*E6 9 Budgeted Production in Units 10 January 11 Units 12 Ending Inventory 13 14 Opening Inventory 15 Production 4000 =C11*0.2 =SUM(B11:512) --B11*0.2 ESUM(B13:B14) February 4200 =D11*0.2 =SUM(C11:C12) --B12 SUM(C13:C14) March 4700 =4500*0.2 =SUM(D11:012) --C12 -SUM(D13:014) 1st Quarter =SUM(B11:011) =D12 SUM(E11:E12) =B14 SUM(E13:14) April 4500 =3900*0.2 =SUM(F11:F12) --D12 =SUM(F13:F14) 16 17 Budgeted cost of Direct Material Purchases 18 19 Production 20 Ending Inventory 21 January =B15 =C19*0.25 =SUM(B19:120) --B19*0.25 =SUM(B21:322) 10.5 =B23*B24 February =C15 =D19*0.25 =SUM(C19:C20) --B20 ESUM(C21:C22) 10.5 =C23*C24 March =D15 F15*0.25 =SUM(D19:D20) --C20 =SUM(D21:D22) 10.5 =D23*024 1st Quarter =E15 =D20 SUM(E19:E20) =B22 =SUM(E21:E22) 10.5 =E23*E24 22 Opening Inventory 23 24 Cost per handisaw 25 Cost pf Raw material 26 27 Direct Labour Budget 28 29 Production 30 Direct Labour Required 31 Total Hours required 32 Direct Labour cost per hour 33 Total Labour Cost January =B19 0.75 =B29*B30 24 =B31*B32 February =C19 0.75 =C29*C30 March =D19 0.75 =D29*D30 1st Quarter =E19 0.75 =E29*E30 24 24 24 =C31*032 =D31D32 =E31*E32