Compute cost of goods sold budget

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Reference no: EM13914464

Wesley’s ending finished goods inventory policy is 35 percent of the next month’s sales. Suppose each handisaw takes approximately .25 hours to manufacture, and Wesley pays an average labor wage of $12.50 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 $72,000 annual fixed overhead (based on production of 24,000 units) and $.90 per unit variable manufacturing overhead. Wesley’s selling expenses are 5 percent of sales dollars, and administrative expenses are fixed at $16,000 per month.

Please compute Cost of Goods Sold Budget.

Reference no: EM13914464

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