answer%20of%20ch6.doc[1]

answer%20of%20ch6.doc[1] - 6-19Production Budget: Finished...

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Unformatted text preview: 6-19Production Budget: Finished Goods (units) sales 50,000 Add target ending finished goods inventory 23,000 requirements 73,000 Deduct beginning finished goods inventory 21,000 Units to be produced 52,000 Direct Materials Purchases Budget: Direct Materials (in gallons) Direct materials needed for production (52,000 *2) 104,000 Add target ending direct materials inventory 55,000 requirements 159,000 Deduct beginning direct materials inventory 65,000 Direct materials to be purchased 94,000 Budgeting material purchases. BudgeteTotal Total 6-21 Budgeting: direct material usage, manufacturing cost and gross margin. 1. Direct Material Usage Budget in Quantity and Dollars Material Wool 8SDye Total Physical Units Budget Direct materials required for Red Rugs (150,000 rugs *40 skeins and 0.5 gal.) 6,000,0000 skeins 75,000 gal. Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) Wool: 402,000 skeins $ 903,500 Dye: 6,000 gallons $ 30,850 To be purchased this period Wool: (6,000,000 -402,000) skeins *$3 per skein 16,794,000 Dye: (75,000 -6,000) gal. *$6 per gal. __________ 414,000 Direct materials to be used this period: (a) + (b) $17,697,500 $ &S )$18,142,350444,8502. overhead rateDyeing budgeted = $13,502,000/ (150000*40 skeins*0.25 MH)= $9.0013 per MH overhead rate3. Budgeted Unit Cost of Red Rug Cost per Unit of Input Input per Unit Of Output TotalWool $3 40 skeins $ 120.00 Dye 6 0.5 gal. 3.00 Direct manufacturing labor 20 60 hrs. 1,200.00 Dyeing overhead 9.0013 10 mach-hrs. 190.013 Weaving overhead 2.1528 60 DMLH 129.168 Total $1,542.18 10.25 machine hour per skein 40 skeins per rug = 10 machine-hrs. per rug....
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answer%20of%20ch6.doc[1] - 6-19Production Budget: Finished...

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