Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $50. Wesley expects the following unit sales: January February 2, 000 2, 500 3, 100 2, 900 2, 200 March April Мay Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Each handisaw takes approximately 0.30 hours to manufacture, and Wesley pays an average labor wage of $15.00 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $4.00 per handisaw. Manufacturing overhead for this product includes $60,000 annual fixed overhead (based on production of 24,000 units) and $.80 per unit variable manufacturing overhead. Wesley's selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $14,000 per month. Required: Compute the budgeted net operating income for January. (Round intermediate calculations to two decimal places. Round final answers to the nearest dollar amount.)
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $50. Wesley expects the following unit sales: January February 2, 000 2, 500 3, 100 2, 900 2, 200 March April Мay Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Each handisaw takes approximately 0.30 hours to manufacture, and Wesley pays an average labor wage of $15.00 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $4.00 per handisaw. Manufacturing overhead for this product includes $60,000 annual fixed overhead (based on production of 24,000 units) and $.80 per unit variable manufacturing overhead. Wesley's selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $14,000 per month. Required: Compute the budgeted net operating income for January. (Round intermediate calculations to two decimal places. Round final answers to the nearest dollar amount.)
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 17E: Crescent Company produces stuffed toy animals; one of these is Arabeau the Cow. Each Arabeau takes...
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Cornerstones of Cost Management (Cornerstones Ser…
Accounting
ISBN:
9781305970663
Author:
Don R. Hansen, Maryanne M. Mowen
Publisher:
Cengage Learning
Principles of Accounting Volume 2
Accounting
ISBN:
9781947172609
Author:
OpenStax
Publisher:
OpenStax College
EBK CONTEMPORARY FINANCIAL MANAGEMENT
Finance
ISBN:
9781337514835
Author:
MOYER
Publisher:
CENGAGE LEARNING - CONSIGNMENT