Question

Joshua Hill, Marigold & Hill Fabricators' production manager, has just received the company's sales budget for the first quarter:

PHOTO ONE

Manufacturing overhead budget for the first quarter follows:

PHOTO ONE

He also received the direct materials purchases budget and direct labor budget which were as follows:

PHOTO TWO

Joshua plans to have 2,072 finished bricks at a cost of $18,130 in inventory at the beginning of the year. The company applies manufacturing overhead based on direct labor hours, and the current predetermined rates are $12 per direct labor hour for fixed manufacturing overhead and $0.70 per dirext labor hour for variable manufacturing overhead.

Prepare Marigold & Hill's ending inventory and COGS budget for the first quarter. Assuming the company has no beginning and ending WIP inventory.

SHOWN IN PIC THREE

Budgeted unit sales Budgeted ending inventory Total units required Beginning inventory Budgeted production January 7,400 2,886 10,286 2,072 8,214 February 14,430 2,590 17,020 2,886 14,134 March 12,950 2,146 15,096 2,590 12,506 Quarter 34,780 2,146 36,926 2,072 34,854 Its manufacturing overhead budget for the first quarter is as follows: March Qus ,127 3 January February 2,054 3,534 $0.70 $0.70 1,438 2,474 41,62541,625 43,063 44,099 DLH worked VOH per DLH Budgeted VOH Budgeted FOH Total Budgeted MOH Noncash MOH items Depreciation Total Cash MOH cost 2 Quarter 8,715 $0.70 6,101 124,875 130,976 $0.70 2,189 41,625 43,814 91.625 11,100 $31,963 $31,963 11,100 $32,999 $32,999 11,100 $32,714 $32,714 33,300 $97,676 597,676

Answer 1

Direct Materials
Ending Inventory	5143
Cost per pound	$            0.40
Ending Inventory	$    2,057.20

Finished Goods
Cost per unit
Direct Material	$            2.00
Direct Labor	$            5.00
Overhead	$            3.18
Total Cost per unit	$          10.18
Units	2146
Ending Inventory	$ 21,835.55

Cost of Goods Sold
Material, Beginning Inventory	$         2,797.20
Add: Material Purchases	$      68,968.00
Materials available	$      71,765.20
Less : Ending Inventory	$         2,057.20
Direct Material Used	$      69,708.00
Direct Labor	$    174,300.00
Overhead	$      97,676.00
Total Cost of Goods manufactured	$    341,684.00
Add: Beginning Inventory, Finished	$      18,130.00
Cost of Goods Available for sale	$    359,814.00
Less : Ending Inventory, Finished	$      21,835.55
Cost of Goods Sold	$    337,978.45