Cougars Company prepares monthly operating and financial budgets. Estimates of s

Question

Cougars Company prepares monthly operating and financial budgets. Estimates of sales in units are made for each month. Production is scheduled at a level high enough to take care of current needs and to carry into each month one-half of the next month's unit sales. Direct materials, direct labor, and variable manufacturing overhead are estimated at USD 12, USD 6, and USD 4 per unit, respectively. Total fixed manufacturing overhead is budgeted at USD 480,000 per month. Sales for April, May, June, and July 2009 are estimated at 100,000, 120,000, 160,000, and 120,000 units. The inventory at 2009 April 1, consists of 50,000 units with a cost of USD 28.80 per unit.

Prepare a schedule showing the budgeted cost of goods sold for the three months assuming that the FIFO method is used for inventories.

Explanation / Answer

Cost of Good Sold Budget

Note 1. Closing Stock

Note :2 Production (units)

Note :3 Cost Sheet

Note :4 Fixed overhead recovery rate($)

Note: 5 Calculation of Value of Closing Stock

Note :6 Direct Material Cost

Note 7 :Direct wages

Note : 8 Overheads

Particulars April May June Direct Materials ( note 6) $1,320,000 $1,680,000 $1,680,000 Direct Wages    (note 7) $660,000 $840,000 $840,000 Overheads        (note 8) $920,000 $1,040,000 $1,040,000 Total $2,900,000 $3,560,000 $3,560,000 Add: Opening Stock $1,440,000 $1,581,600 $2,034,400 Total $4,340,000 $5,141,600 $5,594,400 Less: Closing Stock ( note 5) $1,581,600 $2,034,400 $1,525,800 Cost of Good sold $2,758,400 $3,107,200 $4,068,600

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---