I posted this question and got a solution, can you please double check? -solutio
ID: 2563716 • Letter: I
Question
I posted this question and got a solution, can you please double check?-solution
Bonzo's Boards makes reasonably high-end skateboards which sell for $300 process is fairly simple and involves assembling components purchased from various supp each. The production each skateboard only takes one hour to assemble, there is essentially no Bonzo's Boards has the capacity to make 2,000 skateboards per year Costs for the skateboard components are: suppliers. Since work-in-process inventory Deck $40.00 Trucks Wheels Bearings Bolts, etc Hardware package - net $40.00 45.00 20.00 20.00 125.00 Total $165.00 Each board should take one hour of direct labor to assemble. Direct labor wages are $50 per hour. Other costs on a monthly basis are Rent Insurance Utilities Miscellaneous $1,200.00 149.65 117.00 200.00 1,666.65 Inventory balances are as follows (Bonzo's uses FIFO inventory cost flow assumption) Units Dollars 1/1/2017 300 $12,000 Decks 12/31/2017 350 Budgeted Hardware Package 1/1/2017 260 $32,500 12/31/2017 300 Budgeted Finished skateboards 1/1/2017 300 $ 12/31/2017400 Budgeted
Explanation / Answer
Req 1: Budgeted cost of skate board manufactured Cost of Production per skateboard Deck 40 Trucks 40 Wheels 45 Bearings 20 Bolts etc 20 Labour cost 1 hour @50 50 Cost per unit 215 Expected Sales Units 1000 skateboards Add: Closing inventory units 400 skateboards Less: Opening inventory units 300 skateboards Budgeted unts to be produced 1100 skateboards Cost of production per skate board $ 215 per skateboard Budgted cost of skateboard manufactured ( 1100 *215) = $ 236,500 Note: Overheads expense should not be added in cost of manufacturing Req 2: Budgeted cost of decks purchased Number of units required in Production ( 1100 *1) 1100 decks Add: Closing inventory of decks 350 decks Less Opening inventory of decks 300 decks Budgeted units of decks to be purchased 1150 decks Cost per deck $ 40 per deck Budgeted cost of decks purchased $ 46,000 Req 3: Budgeted cost of hardware purchased Number of units required in Production ( 1100 *1) 1100 package Add: Closing inventory of Hardware package 300 package Less Opening inventory of hardware package 260 package Budgeted units of package to be purchased 1140 packages Cost per package $ 125 per package Budgeted cost of hardware package purchased $ 142,500 Req 4: Dollar value of ending Finished Skateboards Number of skateboards 400 skateboards Cost per skateboard $ 215 per skateboard Ending Finished Skateboard budgeted cost $86,000