Mercury Bag Company produces cases of grocery bags. The managers at Mercury are trying to develop budgets for the upcoming quarter. The following data have been gathered:
|
|
|
|
| Projected sales in units |
|
1,430 |
cases |
| Selling price per case |
$ |
240 |
|
| Inventory at the beginning of the quarter |
|
150 |
cases |
| Target inventory at the end of the quarter |
|
100 |
cases |
| Direct labor hours needed to produce one case |
|
2 |
hours |
| Direct labor wages |
$ |
10 |
per hour |
| Direct materials cost per case |
$ |
8 |
|
| Variable manufacturing overhead cost per case |
$ |
6 |
|
| Fixed overhead costs for the upcoming quarter |
$ |
220,000 |
|