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Borkenstick Makes a Very Popular Undyed Essay

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Borkenstick makes a very popular undyed cloth sandal in one style, but in Regular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth covered wooden soles. Borkenstick is preparing its budget for June 2012, and has estimated sales based on past experience. Other information for the month of June follows:

Borkenstick uses a FIFO cost flow assumption for finished goods inventory. All the sandals are made in batches of 50 pairs of sandals. Borkenstick incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. Borkenstick ships 40 pairs of sandals per shipment. Borkenstick uses
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Manufacturing Overhead Costs Budget For the Month of June 2012 Total Machine setup (Regular 43 batches1 2 hrs./batch + Deluxe 59 batches2 3 hrs./batch) $12/hour Processing (31,400 DMLH $1.20) Inspection (5100 pairs x $0.90 per pair) Total
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Total $107,500 206,500 $314,000

$ 3,156 37,680 4,590 $45,426

Regular: 2,150 pairs ÷ 50 pairs per batch = 43; 2Giant: 2,950 pairs ÷ 50 pairs per batch = 59

f.
Unit Costs of Ending Finished Goods Inventory For the Month of June, 2012 Regular Cost per Input per T Cloth Wood Direct manufacturing labor Machine setup Processing Inspection Total
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Deluxe Input per Unit of Output 1.5 yd 2 bd-ft 7 hrs 0.06 hr1 7 hrs 1 pair Total $ 5.25 10.00 70.00 0.72 8.40 0.90 $95.27

Unit of Input $ 3.50 5.00 10.00 12.00 1.20 0.90

Unit of Output 1.3 yd 0 5 hr. 0.04 hr. 1 5 hrs 1 pair

otal $ 4.55 0 50.00 0.48 6.00 0.90 $61.93

2 hours per setup ÷ 50 pairs per batch = 0.04 hr. per unit; 3 hours per setup ÷ 50 pairs per batch = 0.06 hr. per unit.

Ending Inventories Budget June, 2012 Quantity Cost per unit Direct Materials Cloth Wood Finished goods Regular Deluxe Total ending inventory g. Cost of Goods Sold Budget For the Month of June, 2012 Beginning finished goods inventory, June 1 ($15,500 + $61,750) Direct materials used (requirement c) Direct manufacturing labor (requirement d)
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