Black & Decker (B&D) manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following fictitious information about this product line to complete the problem requirements. Each handisaw sells for $40. B&D expects the following unit sales.
- January 2,100
- February 2,500
- March 3,000
- April 2,600
- May 2,000
B&D's ending finished goods inventory policy is 20 percent of the next month's sales.
Suppose each handisaw takes approximately .55 hours to manufacture, and B&D pays an average labor wage of $14.50 per hour.
Each handisaw requires a plastic housing that B&D purchases from a supplier at a cost of $6.00 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 $3.50 per handisaw.
Manufacturing overhead for this product includes $69,000 annual fixed overhead (based on production of 24,000 units) and $.90 per unit variable manufacturing overhead. B&D's selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $18,000 per month.
Requirement 1:
Calculate the cost of goods sold budget for Black & Decker (B&D) for the first quarter (January, February, and March). Include each month as well as the first quarter. (Round cost per unit to 2 decimal places. Round final answers to the nearest dollar amount. Omit the "tiny_mce_markerquot; sign in your response.)