Bowshar Hills Company sells shoes and expects to produce and sell 20,000 units during the year 2022 with no beginning or ending inventories as it plans to produce what it can sell during the same year. The total budgeted fixed manufacturing overhead cost for the year is $50,000. The company accounts show that the budgeted direct material cost is $4 per unit, budgeted direct labor cost is $6 per direct labor hour, and budgeted variable manufacturing overhead is $2 per direct labor hour. Each unit produced takes 2 hours of skilled labor time. The cost of goods sold reported in the budgeted income statement for 2022 is: O a. $650,000 O b. $1,050,000 Oc. $850,000 O d. $450,000 O e. None of the given answers

Bowshar Hills Company sells shoes and expects to produce and sell 20,000 units during the year 2022 with no beginning or ending inventories as it plans to produce what it can sell during the same year. The total budgeted fixed manufacturing overhead cost for the year is $50,000. The company accounts show that the budgeted direct material cost is $4 per unit, budgeted direct labor cost is $6 per direct labor hour, and budgeted variable manufacturing overhead is $2 per direct labor hour. Each unit produced takes 2 hours of skilled labor time. The cost of goods sold reported in the budgeted income statement for 2022 is: O a. $650,000 O b. $1,050,000 Oc. $850,000 O d. $450,000 O e. None of the given answers

Entrepreneurial Finance

6th Edition

ISBN:9781337635653

Author:Leach

Publisher:Leach

Chapter4: Preparing And Using Financial Statements

Section: Chapter Questions

Problem 2EP

See similar textbooks

Similar questions

Total Pops data show the following information: New machinery will be added in April. This machine will reduce the labor required per unit and increase the labor rate for those employees qualified to operate the machinery. Finished goods inventory is required to be 20% of the next months requirements. Direct material requires 2 pounds per unit at a cost of $3 per pound. The ending inventory required for direct materials is 15% of the next months needs. In January, the beginning inventory is 3,000 units of finished goods and 4,470 pounds of material. Prepare a production budget, direct materials budget, and direct labor budget for the first quarter of the year.
Patterson Corporation expects to incur 70,000 of factory overhead and 60,000 of general and administrative costs next year. Direct labor costs at 5 per hour are expected to total 50,000. If factory overhead is to be applied per direct labor hour, how much overhead will be applied to a job incurring 20 hours of direct labor? a. 120 b. 260 c. 28 d. 140
A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? Budgeted direct labor hours: 60,000 Budgeted direct labor expense: $1,500,000 Estimated machine hours: 100,000
A company produces two products. E and F in batches of 100 units. The production and cost data are: The company can only perform 12,000 set-ups each period yet there is unlimited demand for each product. What is the differential profit from producing product E instead of product F for the year? A. $216,000 B. $204,000 C. $12,000 D. $54,000
3. Bowshar Hills Company sells shoes and expects to produce and sell 20,000 units during the year 2022 with no beginning or ending inventories as it plans to produce what it can sell during the same year. The total budgeted fixed manufacturing overhead cost for the year is $ 50,000. The company accounts show that the budgeted direct material cost is $ 4 per unit, budgeted direct labor cost is $ 6 per direct labor hour, and budgeted variable manufacturing overhead is $ 2 per direct labor hour. Each unit produced takes 2 hours of skilled labor time. The cost of goods sold in the budgeted income statement for 2022 is?
QUESTION God’s Will Ent., GWT, started its business in 2021. The following information was available for January to March 31, 2021 for the company that started to produce a single product: GHȻSelling price per unit 200Direct materials per unit 40Direct Labour per unit 20Fixed factory overhead per month 60,000 Variable factory overhead per unit 10Fixed selling overheads…
1. a. We are doing our budgeting for 2021. In 2021 we will apply overhead based on machine hours. Our 2021 estimated manufacturing overhead is $720,000. We expect to work 50,000 direct labor hours at $25/hour, and use 20,000 machine hours. Our predetermined overhead rate is $________________________ per _______________ 1.b. (Continuation of 1.a.) Job 572 uses $750 of direct materials, 20 direct labor hours and 5 machine hours. The cost of the job is $ _____________________ 1. c. (continuation of 1.a, b) The work-in-process account for the month has the following items: Direct labor4,000 hours @ $25/hour Direct materials$150,000 Work in process, beginning inventory$60,000 Work in process, ending inventory$25,000 2,100 machine hours were used. What amount was transferred from Work in Process Inventory to Finished Goods Inventory? Show it in the journal entry to record the transfer. 1. d. (continuation of 1. a, b, c) We close out the Manufacturing Overhead account…
1. a. We are doing our budgeting for 2021. In 2021 we will apply overhead based on machine hours. Our 2021 estimated manufacturing overhead is $720,000. We expect to work 50,000 direct labor hours at $25/hour, and use 20,000 machine hours. Our predetermined overhead rate is $________________________ per _______________ 1.b. (Continuation of 1.a.) Job 572 uses $750 of direct materials, 20 direct labor hours and 5 machine hours. The cost of the job is $ _____________________ 1. c. (continuation of 1.a, b) The work-in-process account for the month has the following items: Direct labor4,000 hours @ $25/hour Direct materials$150,000 Work in process, beginning inventory$60,000 Work in process, ending inventory$25,000 2,100 machine hours were used. What amount was transferred from Work in Process Inventory to Finished Goods Inventory? Show it in the journal entry to record the transfer. 1. d. (continuation of 1. a, b, c) We close out the Manufacturing Overhead account…
H6. Broduer Aquatics manufactures swimming pool equipment. Broduer estimates total manufacturing overhead costs next year to be $2,500,000 The company also estimates it will use 50,000 direct labour hours and incur $1,000,000 of direct labour cost next year. In addition, the machines are expected to be run for 30,000 hours. Compute the predetermined manufacturing overhead rate for next year under the following independent situations: 1. Assume that Brodeur uses direct labour hours as its manufacturing overhead allocation base. 2. Assume that Brodeur suses direct labour cost as its manufacturing overhead allocation base. 3. Assume that Brodeur uses machine hours as its manufacturing allocation base
The following manufacturing costs were incurred by the Miracle Mile Company in 2019: Direct materials $ 225,000 Direct labor 350,000 Manufacturing overhead 470,000 These costs were incurred to produce 50,000 units of product. Variable manufacturing overhead was 70% of the direct materials cost. In 2020, the direct material and variable overhead costs per unit will increase by 12%, but the direct labor costs per unit are not expected to change. Fixed manufacturing costs are expected to increase by 8%.Required:(a.) Prepare a cost estimate for an activity level of 40,000 units of product in 2020.(b.) Determine the total product costs per unit for 2019 and 2020.
Q48 Cap Incorporated manufactures ball point pens that sell at wholesale for $0.80 per unit. Budgeted production in both 2021 and 2022 was 11,000 units. There was no beginning inventory in 2021. The following data summarized the 2021 and 2022 operations: 2021 2022 Units sold 9,500 7,000 Units produced 11,000 8,000 Costs: Variable factory overhead per unit $ 0.15 $ 0.15 Fixed factory overhead $ 2,200 $ 1,600 Variable marketing per unit $ 0.30 $ 0.30 Fixed Selling and Administrative $ 320 $ 320 Full costing operating income for 2021 is calculated to be: (Do not round intermediate calculations. Round your final answers to whole dollar amounts.) Multiple Choice $251. $1,105. $2,150. $1,630. $1,480.
Jules Company manufactures and sells two products GK320 and GK340. It had budgeted to produce 25,000 units each for both GK320 and GK340. The following costs were incurred during 2020, the company’s first year of operations. Variable Cost per unit Details GK320 $ GK340 $ Direct materials 18 13 Direct labour 5 7 Variable overheads 2 7 Fixed production overhead 200,000 200,000 Fixed selling and administrative overheads for the company was $65,000. During 2020, the company produced 20,000 units for GK320 and 15,000 units for GK340. The company sold 16,000 units for GK320 and 10,000 units for GK340. The selling price of the company’s product is $50 per unit for both products. Required for both products: c) Assume that the company uses the variable costing method: i. Compute the variable cost of producing one unit of each product. ii. Prepare an income statement…