90.2K

Verified Solution

Link Copied!

Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following information about this product line to complete the problem requirements. Each handisaw sells for $ 44. Wesley expects the following unit sales: Wesley's ending finished goods inventory policy is 30 percent of the next month's sales. Suppose each handisaw takes approximately 0.75 hours to manufacture, and Wesley pays an average labor wage of $ 18 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $ 7.00 each. The company has an ending raw materials inventory policy of 25 percent of the following month's production requirements. Materials other than the housing unit total $ 4.50 per handisaw. Manufacturing overhead for this product includes $ 72,000 annual fixed overhead (based on production of 27,000 units) and $ 1.20 per unit variable manufacturing overhead. Wesley's selling expenses are 7 percent of sales dollars, and administrative expenses are fixed at $ 18,000 per month. Required Compute the following for the first quarter: (Round your intermediate calculations for Direct Labor Budget to 2 decimal places and other intermediate calculations to nearest whole dollar.)

Answer & Explanation Solved by verified expert

See Answer