Question

Trago Company manufactures a single product and has a JIT policy that ending inventory must equal...

Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 30,000 units. June and July sales are estimated to be 300,000 and 310,000 units, respectively. Trago assigns variable overhead at a rate of $3.80 per unit of production. Fixed overhead equals $420,000 per month. Compute the number of units to be produced and use this amount to compute the total budgeted overhead that would appear on the factory overhead budget for the month of June.

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1
Ans.
Production Budget
June
Expected units sales 300000
Add: Desired ending inventory 31000
Total required units 331000
Less: Beginning inventory -30000
Units to be produced 301000
*Ending inventory for June = 10% of July sales = 310000 * 10% = 31000
*Beginning inventory for June = Ending inventory for May = 30000
Factory Overhead Budget
Units to be produced 301000
(X) Variable overhead per unit 3.8
Budgeted variable overhead 1143800
Budgeted fixed overhead 420000
Budgeted total overhead 1563800
0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1.) Trago Company manufactures a single product and has a JIT policy that ending inventory must...
1.) Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 10% of the next month's sales. It estimates that May's ending inventory will consist of 29,800 units. June and July sales are estimated to be 298,000 and 308,000 units, respectively. Trago assigns variable overhead at a rate of $3.60 per unit of production. Fixed overhead equals $418,000 per month. Compute the number of units to be produced and use this amount to compute...
Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of...
Walker Company prepares monthly budgets. The current budget plans for a September ending merchandise inventory of 30,000 units. Company policy is to end each month with merchandise inventory equal to 15% of budgeted sales for the following month. Budgeted sales and merchandise purchases for the next three months follow. The company budgets sales of 200,000 units in October. Sales (Units) Purchases (Units) July 170,000 191,000 August 310,000 308,500 September 300,000 285,000 Prepare the merchandise purchases budgets for the months of...
Vermicelli Company plans to sell 310,000 units of finished product in July and anticipates a growth...
Vermicelli Company plans to sell 310,000 units of finished product in July and anticipates a growth rate in sales of 5% per month. The desired monthly ending inventory in units of finished product is 80% of the next month's estimated sales. There are 260,000 finished units in inventory on June 30. Vermicelli Company's production requirement in units of finished product for the three-month period ending September 30 is: (CMA adapted) a) 1074226 b) 977275 c) 1056700 d) 1004366
QUESTION 1 A company manufactures and sells a single product which has the following cost and...
QUESTION 1 A company manufactures and sells a single product which has the following cost and selling price structure: £/unit £/unit Selling price 120 Direct material 22 Direct labour 36 Variable overhead 14 Fixed overhead 12 84 Profit per unit 36 The fixed overhead absorption rate is based on the normal capacity of 2,000 units per month. Assume that the same amount is spent each month on fixed overheads. Budgeted sales for next month are 2,200 units. You are required...
Trevorrow Corporation manufactures and sells a single product. the company uses units as the measure of...
Trevorrow Corporation manufactures and sells a single product. the company uses units as the measure of activity in its budgets and performance reports. During June, the company budgeted for 5,800 units, but its actual level of activity was 5,760 units. The company has provided the following data concerning the formulas used in its budgeting and its actual results for June: Data used in budgeting: Revenue: $29.20 Variable element per unit Direct Labor $3.80 Variable element per unit Direct Materials: $9.90...
ALABAMA CORPORATION The company manufactures a single product, cleverly named Product X. The following information is...
ALABAMA CORPORATION The company manufactures a single product, cleverly named Product X. The following information is available for the calendar year 2018 just completed, during which they produced and sold 200,000 units. Sales for the year was $2,400,000. During the year, the company paid a sales commission of 5 percent of sales. The corporate income tax rate was 20%. Direct materials purchases $300,000 Direct labor 140,000 Depreciation - factory equipment 45,000 Depreciation - factory building 30,000 Depreciation - headquarters building...
1) Suppose Cook Pro manufactures cast iron skillets. One model is a​ 10-inch skillet that sells...
1) Suppose Cook Pro manufactures cast iron skillets. One model is a​ 10-inch skillet that sells for $36. Cook Pro projects sales of 575 10-inch skillets per month. The production costs are $13 per skillet for direct​ materials, $2 per skillet for direct​ labor, and $4 per skillet for manufacturing overhead. Cook ProCook Pro has 40 ​10-inch skillets in inventory at the beginning of July but wants to have an ending inventory equal to 20​% of the next​ month's sales....
Corbett Company manufactures drinking glasses. One unit is a package of eight​ glasses, which sells for...
Corbett Company manufactures drinking glasses. One unit is a package of eight​ glasses, which sells for $18. Corbett projects sales for April will be 3,500 ​packages, with sales increasing by 100 packages per month for May​, June​, and July. On April ​1, Corbett has 250 packages on hand but desires to maintain an ending inventory of 10​% of the next​ month's sales. Prepare a sales budget and a production budget for Corbett for April​, May​, and June. Corbett Company Sales...
Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will...
Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It began negotiating for a one-month bank loan of $500,000 starting May 1. The bank would charge interest at the rate of 1.00 percent per month and require the company to repay interest and principal on May 31. In considering the loan, the bank requested a projected income statement and cash budget for May. The following information...
Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will...
Brighton, Inc., manufactures kitchen tiles. The company recently expanded, and the controller believes that it will need to borrow cash to continue operations. It began negotiating for a one-month bank loan of $500,000 starting May 1. The bank would charge interest at the rate of 1 percent per month and require the company to repay interest and principal on May 31. In considering the loan, the bank requested a projected income statement and cash budget for May. The following information...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT