Renfrow International manufactures and sells a single product. In preparing its
ID: 2374284 • Letter: R
Question
Renfrow International manufactures and sells a single product. In preparing its master budget for the current quarter, the company's controller has assembled the following information:
Renfrow International used the average cost method of pricing its inventory of finished goods.
Compute the planned production of finished goods (in units).
Compute the cost of finished goods manufactured. (Omit the "$" sign in your response.)
Compute the ending finished goods inventory (Remember that in using the average cost method, you must first compute the average cost of units available for sale.) (Omit the "$" sign in your response.)
Compute the Cost of goods sold. (Omit the "$" sign in your response.)
Renfrow International manufactures and sells a single product. In preparing its master budget for the current quarter, the company's controller has assembled the following information:
Explanation / Answer
a) planned production of finished goods
= Sales + Ending Inventory - Beginning Inventory
= 150,000 + 28,000 - 38,000
= 140,000 units
b) Cost of finished goods = 140,000 * 28 = $3,920,000
c) Total cost of goods available to sold = 3,920,000 + 975,000 = $4,895,000
Average cost of goods available to sold = $4,895,000 / (140,000+38,000) = $27.5
Finished goods inventory = 28,000 * $27.5 = 770,000
d) Cost of Good Sold = 150,000 * $27.5 = $4,125,000