Question

Please Show Work Typed On Computer Not Hand Written. Thank you! :)

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Question 6

Garfield Corp. expects to sell 1,520 units of its pet beds in March and 2,170 units in April. Each unit sells for $76. Garfield’s ending inventory policy is 40 percent of the following month’s sales. Garfield pays its supplier $27 per unit.

What is Garfield's budgeted purchases for March?

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Question 7

Preston, Inc., manufactures wooden shelving units for collecting and sorting mail. The company expects to produce 420 units in July and 640 units in August. Each unit requires 9 feet of wood at a cost of $1.6 per foot. Preston wants to always have 10% of the next month’s required feet of wood on hand in materials inventory.

What is Preston’s raw materials purchases budget for July?

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Question 8

Avery Company has compiled the following data for the upcoming year:
Sales are expected to be 6,700 units at $32 each.

• Each unit requires 1.3 pounds of direct materials at $2.8 per pound.
• Each unit requires 1.3 hours of direct labor at $14 per hour.
• Manufacturing overhead is $4 per unit.
• Selling and administrative costs are $4 per unit.

What is Avery's budgeted cost of goods sold?

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Question 9

Randall has received a special order for 2,370 units of its product at a special price of $20. The product normally sells for $27 and has the following manufacturing costs:

	Per unit
Direct materials		$	3
Direct labor			5
Variable manufacturing overhead			2
Fixed manufacturing overhead			1

Assume that Randall has sufficient capacity to fill the order. If Randall accepts the order, what effect will the order have on the company’s short-term profit?

If a decrease, place a – sign before your answer.

For example, a decrease of $1,000 would be answered –1,000.

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Answer 1

6.
Budgeted Purchases (Units) = 1520 + 2170 x 40% - 1520 x 40% = 1780 Units
Budgeted Purchase (Dollars) = 1780 x $27 = $48060

7.
Raw Material Purchase Budget = $6365 or $6364.80

Direct Material Budget
	July	August
Production Required	420	640
Raw Material Per unit	9	9
Raw Material for Production	3780	5760
Add : Desired Ending Inventory	576
Total Material Required	4356
Less : Beginning Inventory	378
Material to be purchased	3978
Cost per Pound	$              1.60
Raw material purchase cost	$           6,365

8.
Cost of Goods Sold = 6700 x (1.3 x 2.8 + 1.3 x 14 + 4) = $173128

9.
Increase in Profit = 2370 x ($20-3-5-2) = $23700