Assume you have developed and tested a prototype electronic product and are about to start your new
business. You purchase preprogrammed computer chips at $70 per unit. Other component costs include
plastic casings at $15 per unit, and assembly hardware at $5 per unit. Direct labor costs are $15 per hour
and three units can be produced per hour. You intend to sell each unit at a 50 percent markup over the
total costs of producing each unit. The plan is to produce 500 product units per month in January,
February, and March. Sales are expected to be 200 units in January, 400 units in February, and 800 units
Calculate the dollar amount of sales revenue expected in each month (i.e., January, February, and
March) and for the first quarter of the year.
Prepare a cost of production schedule for January, February, and March.
Prepare a cost of goods sold schedule for each of the three months and for the first quarter of the
year. Using your cost of goods sold estimates and the sales revenues expected in Part A, calculate