1. Estimated unit sales for the first quarter of 2021 is 40,000 units and expected to increase 10% quarterly. Selling price fluctuates as follows: Quarter 1st 2nd 3rd 4th Unit price 64 66 62 62 Assume that of each quarter's sales: 20% are cash sales while the remaining 80% are credit sales. Shrek & Fiona Company estimates that 60% of credit sales are collected in the quarter of sale with 2% discount, 30% in the quarter of following sale, 9% in the second quarter following sale and 1% are considered as uncollectible. 2. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.)
1. Estimated unit sales for the first quarter of 2021 is 40,000 units and expected to increase 10% quarterly. Selling price fluctuates as follows: Quarter 1st 2nd 3rd 4th Unit price 64 66 62 62 Assume that of each quarter's sales: 20% are cash sales while the remaining 80% are credit sales. Shrek & Fiona Company estimates that 60% of credit sales are collected in the quarter of sale with 2% discount, 30% in the quarter of following sale, 9% in the second quarter following sale and 1% are considered as uncollectible. 2. Finished product requires 3 pounds of direct materials at P2.50 per pound. Finished good ending inventory is equal to 10% of the next quarter sales while raw materials ending inventory is equal to 10% of the next quarter production needs of materials. First quarter of 2022 sales is expected to be at 50,000 units while raw materials ending is at 13,500 pounds. (Units are rounded to the nearest ones.)
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter8: Budgeting For Planning And Control
Section: Chapter Questions
Problem 7CE: Refer to Cornerstone Exercise 8.6. Required: 1. Calculate the total budgeted cost of units produced...
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