Lito Fray Company produces potato chips. The company expects to sell 45,000 bags of chips for $3 each in 2018. The expected cost of potatoes is $0.60 per pound. Each bag of chips requires 1.8 pounds of potatoes. Direct labor is $0.20 per bag and manufacturing overhead is $0.65 for each bag. The following inventory levels apply to 2018 (there are no work in process inventories): Beginning Inventory Pounds of potatoes (direct materials) 18,700 pounds Bags of chips (finished goods inventory) 16,700 bags Ending Inventory 20,600 pounds 15,600 bags What is the expected cash expenditure for potato purchases in 2018? a. $48,552 b. $48,600 c. $49,740 d. $27,480 e. $28,140 f. $80,920 & $50,604 h. None of the above
Lito Fray Company produces potato chips. The company expects to sell 45,000 bags of chips for $3 each in 2018. The expected cost of potatoes is $0.60 per pound. Each bag of chips requires 1.8 pounds of potatoes. Direct labor is $0.20 per bag and manufacturing overhead is $0.65 for each bag. The following inventory levels apply to 2018 (there are no work in process inventories): Beginning Inventory Pounds of potatoes (direct materials) 18,700 pounds Bags of chips (finished goods inventory) 16,700 bags Ending Inventory 20,600 pounds 15,600 bags What is the expected cash expenditure for potato purchases in 2018? a. $48,552 b. $48,600 c. $49,740 d. $27,480 e. $28,140 f. $80,920 & $50,604 h. None of the above
Excel Applications for Accounting Principles
4th Edition
ISBN:9781111581565
Author:Gaylord N. Smith
Publisher:Gaylord N. Smith
Chapter16: Manufacturing Accounting (mfg)
Section: Chapter Questions
Problem 2R
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