Question

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020. Estimated unit sales Sales price per unit Direct labor hours per unit Wage per direct labor hour January 10,400 $50.90 . 2.2 $8 February 11,500 $48.30 2.2 $8 March 8,900 $48.30 1.5 April 8,700 $48.30 1.5 $9 May 8,500 $48.30 1.5 $8 $9 Lowell has a labor contract that calls for a wage increase to $9 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1. Lowell expects to begin the year with 16,150 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 50% of the second following month's sales. Your answer is partially correct. Try again. Prepare a production budget for Lowell Company by month and for the first quarter of the year. od LOWELL COMPANY Production Budget Jan Feb Mar Total Expected Unit Sales T10400 711500 18900 Add Desired Ending Finished Goods Unit fotal Required Units

Answer 1

Production Budget
	Jan	Feb	Mar	Total
Estimated Unit Sales	10,400	11,500	8,900
Add: Desired Ending Finished goods inventory	15,950	13,250	12,950
Total Required	26,350	24,750	21,850
Less: beginning finished goods inventory	16,150	15,950	13,250
Required Production	10,200	8,800	8,600	27,600
Direct Labor Budget
	Jan	Feb	Mar	Total
Units to be produced	10,200	8,800	8,600	27,600
Direct labor time per unit	2.2	2.2	1.5
Total Labor time required	22,440	19,360	12,900
Wages per hour	8	8	8
Total Direct labor cost	179,520	154,880	103,200	437,600

E F G 2 Feb Total April 8700 May 8500 А в D 1 Production Budget Jan Mar 3 Estimated Unit Sales 10400 11500 8900 4 Add: Desired Ending Finished goods inventory =C3*100%+D3*50% =D3*100%+F3*50% =F3*100%+G3*50% 5 Total Required =SUM(B3:34) =SUM(C3:04) =SUM(D3:04) 6 Less: beginning finished goods inventory 16150 =B4 =C4 7 Required Production =B5-B6 =C5-C6 =D5-D6 =SUM(B7:07) 8 Feb Total =E7 9 Direct Labor Budget 10 11 Units to be produced 12 Direct labor time per unit 13 Total Labor time required 14 Wages per hour 15 Total Direct labor cost 16 Jan =B7 2.2 =B11*B12 =C7 2.2 =C11*C12 Mar =D7 1.5 =D11*D12 =B13*B14 =C13*C14 =D13*D14 =SUM(B15:D 15)