Preparation of Individual Budgets During the first calendar quarter of 2016, Cli
ID: 2538791 • Letter: P
Question
Preparation of Individual Budgets During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 6,000 units in the urban region at a unit price of $53 and 5,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 4,000-unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses: Variable Fixed (per unit) (total) Manufacturing costs: Direct materials A (4 1b.53.15/b.) B(2 lb.@$4.65/lb.) 12.60 930 7.50 Direct labor (0.5 hours per unit) Manufacturing overhead: Factory supplies Supervisory salaries Other $7,650 90 4 500 . 28,800 0.75 22,950 Operating expenses: Selling Advertising Sales salaries & commissions* Other* 22,500 50 15,000 .90 3,000 Administrative Office salaries 2,700 Supplies 0.15 1,050Explanation / Answer
1.
Working:
2.
Working:
4.
b.
Sales $543,000