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  3. suppose iron city manufactures cast iron skillets.

Suppose Iron City manufactures cast iron skillets. One model is a 10-inch skillet that sells...

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Accounting

Suppose Iron City manufactures cast iron skillets. One model is a 10-inch skillet that sells for $20. Iron City projects sales of 500 10-inch skillets per month. The production costs are $9 per skillet for direct materials, $1 per skillet for direct labor and $2 per skillet for manufacturing overhead. Iron City has 50 10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 20% of the next months sales. Selling and administrative expenses for this product line are $1,500 per month.

Required:

  1. How many 10-inch skillets should Iron City produce in July?
  2. Compute the total amount budgeted for production costs for July.
  3. Compute the budgeted cost of goods sold for July.
  4. Compute the budgeted gross profit for July.

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