Maurice Tutor
$15/per page/Negotiable
Selected information concerning sales and production for Cabot Co. for July 2008 are summarized as follows:
a. Estimated sales:
|
Product K: |
40,000 units at $30.00 per unit |
|
Product L: |
20,000 units at $65.00 per unit |
b. Estimated inventories, July 1, 2008:
|
Material A: |
4,000 lbs. |
Product K: 3,000 units at $17 per unit |
$ 51,000 |
|
Material B: |
3,500 lbs. |
Product L: 2,700 units at $35 per unit |
94,500 |
|
 |
 |
Total |
$145,500 |
There were no work in process inventories estimated for July 1, 2008.
c. Desired inventories at July 31, 2008:
|
Material A: |
3,000 lbs. |
Product K: 2,500 units at $17 per unit |
$ 42,500 |
|
Material B: |
2,500 lbs. |
Product L: 2,000 units at $35 per unit |
70,000 |
|
 |
 |
Total |
$112,500 |
There were no work in process inventories desired for July 31, 2008.
d. Direct materials used in production:
|
 |
Product K |
Product L |
|
Material A: |
0.7 lb. per unit |
3.5 lbs. per unit |
|
Material B: |
1.2 lbs. per unit |
1.8 lbs. per unit |
e. Unit costs for direct materials:
|
Material A: |
$4.00 per lb. |
|
Material B: |
$2.00 per lb. |
f. Direct labor requirements:
|
 |
Department 1 |
Department 2 |
|
Product K |
0.4 hour per unit |
0.15 hour per unit |
|
Product L |
0.6 hour per unit |
0.25 hour per unit |
g.
|
 |
Department 1 |
Department 2 |
|
Direct labor rate |
$12.00 per hour |
$16.00 per hour |
h. Estimated factory overhead costs for July:
|
Indirect factory wages |
$200,000 |
|
Depreciation of plant and equipment |
40,000 |
|
Power and light |
25,000 |
|
Indirect materials |
34,000 |
|
Total |
$299,000 |
Instructions
1. Prepare a sales budget for July.
2. Prepare a production budget for July.
3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
5. Prepare a cost of goods sold budget for July.