Wesley Power Tools manufactures a wide variety of tools andaccessories. One of its more popular items is a cordless powerhandisaw. Each handisaw sells for $60. Wesley expects the followingunit sales:

January	2,300
February	2,600
March	2,800
April	2,900
May	2,300

Wesley’s ending finished goods inventory policy is 35 percent ofthe next month’s sales.

Suppose each handisaw takes approximately 0.35 hours tomanufacture, and Wesley pays an average labor wage of $15.50 perhour.

Each handisaw requires a plastic housing that Wesley purchases froma supplier at a cost of $6.00 each. The company has an endingdirect materials inventory policy of 10 percent of the followingmonth’s production requirements. Materials other than the housingunit total $3.50 per handisaw.

Manufacturing overhead for this product includes $66,000 annualfixed overhead (based on production of 27,000 units) and $1.00 perunit variable manufacturing overhead. Wesley’s selling expenses are6 percent of sales dollars, and administrative expenses are fixedat $16,000 per month.

1. Compute the budgeted cost of goods sold forthe first quarter.
2. Compute the budgeted selling and administrativeexpenses for the first quarter.
3. Complete the budgeted income statement for thehandisaw product for the first quarter