Preparing an Ending Finished Goods Inventory Budget Andrews Company manufactures a line of office chairs. Each chair takes $18 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.10 per direct labor hour, and the fixed overhead rate is $1.50 per direct labor hour. Andrews expects to have 770 chairs in ending inventory. There is no beginning inventory of office chairs. Required: 1. Calculate the unit product cost. Round your answer to the nearest cent. $fill in the blank 1 2. Calculate the cost of budgeted ending inventory. Round your answer to the nearest dollar. $fill in the blank 2
Master Budget
A master budget can be defined as an estimation of the revenue earned or expenses incurred over a specified period of time in the future and it is generally prepared on a periodic basis which can be either monthly, quarterly, half-yearly, or annually. It helps a business, an organization, or even an individual to manage the money effectively. A budget also helps in monitoring the performance of the people in the organization and helps in better decision-making.
Sales Budget and Selling
A budget is a financial plan designed by an undertaking for a definite period in future which acts as a major contributor towards enhancing the financial success of the business undertaking. The budget generally takes into account both current and future income and expenses.
Preparing an Ending Finished Goods Inventory Budget
Andrews Company manufactures a line of office chairs. Each chair takes $18 of direct materials and uses 1.9 direct labor hours at $16 per direct labor hour. The variable overhead rate is $1.10 per direct labor hour, and the fixed overhead rate is $1.50 per direct labor hour. Andrews expects to have 770 chairs in ending inventory. There is no beginning inventory of office chairs.
Required:
1. Calculate the unit product cost. Round your answer to the nearest cent.
$fill in the blank 1
2. Calculate the cost of budgeted ending inventory. Round your answer to the nearest dollar.
$fill in the blank 2
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