Manufacturing Budget; Overhead Rate. The initial survey of the budget committee of Techni- Toy, Inc. indicates a sales forecast of 95,000 plastic dolls. Management also plans to produce 5,000 dolls for stock. The purchasing agent indicates that economic lot purchases of 3,500 kilograms of plastic @ $.60 per kg. and 2,000 liters of paint @ $3 per liter are required to produce the 100,000 units.
Budgeted factory overhead expenses for this production schedule amount to: Fixed factory overhead:
Depreciation – buildings . Depreciation – equipment. . Supervision . Insurance , .
Variable factory overhead:
Indirect labor . Indirect supplies . General factory .
Labor hours and rates for the two operations are:
S 500
800
3,200
220
S .250 per direct labor hour
.004 per unit
.050 per direct labor hour
Plastic Molder 2,000 hours @ $3.20 per hour
Painter 1,200 hours @ 3.00 per hour
Required: (1) A manufacturing budget.
(2) The factory overhead rate based on direct labor hours.
11. Budgeted Cost of Goods Sold and Merchandise Purchases. The Zel Company, a wholesaler, budgeted these sales for June, July, and August of 19-:
June, 19– July, 19–
August, 19–
Sales on account.
.
$1,500,000
$1,600,000
$1,700,000
Cash sales
.
200,000
210,000
220,000
Total sales
.
$1,700,000
$1,810,000
$1,920,000
All merchandise is marked up to sell at its invoice cost plus 25%. Mer- chandise inventories at the beginning of each month are at 30% of that month's projected cost of goods sold.
Required: (1) The cost of goods sold for June, 19-. (2) Merchandise purchases for July, 19-.