Question

1. Mason, Inc. has prepared the following budgets for May. In May, budgeted production is 1,000 units, budgeted sales is 1,200 units, and direct materials inventory unit costs will stay constant.

Direct materials	$	8.25	per unit
Direct labor	$	12.60	per unit
Variable manufacturing overhead	$	8.40	per unit
Fixed manufacturing overhead	$	8,400

What is budgeted cost of goods sold for May?

Multiple Choice

• $37,650

• $36,171

• $45,180

• $43,500

PART 2

Nino has forecast sales for the next three months as follows: July 5,000 units, August 7,000 units, September 8,500 units. Nino's policy is to have an ending inventory of 40% of the next month's sales needs on hand. July 1 inventory is projected to be 2,500 units. Selling and administrative costs are budgeted to be $25,000 per month plus $5 per unit sold. What are budgeted selling and administrative expenses for September?

Multiple Choice

• $67,500

• $86,800

• $41,800

• $39,000

Answer 1

Ans. 1	Option 4th $43,500
	*Calculations:
	Particulars	Amount
	Direct materials ($8.25 * 1,200)	$9,900
	Direct materials ($12.60 * 1,200)	$15,120
	Variable manufacturing overhead ($8.40 * 1,200)	$10,080
	Fixed manufacturing overhead	$8,400
	Total cost of goods sold	$43,500
Ans. 2	Option 1st $67,500
	Budgeted selling and administrative expenses = $25,000 + ($5 * 8,500)
	$25,000 + $42,500
	$67,500