Question

# Fosnight Enterprises prepared the following sales? budget: Month Budgeted Sales March \$ 9 comma 000\$9,000 April...

Fosnight Enterprises prepared the following sales? budget:

 Month Budgeted Sales March \$ 9 comma 000\$9,000 April \$ 15 comma 000\$15,000 May \$ 13 comma 000\$13,000 June \$ 12 comma 000\$12,000

The expected gross profit rate is

2020?%

and the inventory at the end of February was

\$ 12 comma 000\$12,000.

Desired inventory levels at the end of the month are

1010?%

of the next? month's cost of goods sold.

What is the budgeted cost of goods sold for? May?

Brittany Furniture manufactures two? products: Futons and Recliners. The following data are? available:

 Futons Recliners Sales price \$ 550\$550 \$ 750\$750 Variable costs \$ 360\$360 \$ 425\$425

The company can manufacture

33

futons per machine hour and

11

recliners per machine hour. The? company's production capacity is

9 comma 8009,800

machine hours per month.

What is the contribution margin per machine hour for? recliners?

 Solution: 1st The budgeted cost of goods sold for? May = \$10,400 Working Notes: Cost of goods sold = Sales - Gross profit =\$13,000 - (20% x \$13,000) =10,400 The budgeted cost of goods sold for? May = \$10,400 2nd. The contribution margin per machine hour for? recliners =\$3,575 Working Notes: Futons Recliners Sales price \$550 \$750 Less: Variable costs (\$360) (\$425) Contribution margin per unit \$190 \$325 No. of units manufactured in 1 mhrs 33 11 Contribution margin for 1hour \$6,270 \$3,575 [ Contribution margin per unit x no. of units produced in 1 m/c hours] Please feel free to ask if anything about above solution in comment section of the question.

#### Earn Coins

Coins can be redeemed for fabulous gifts.