Question 1. Fantastic Futons go through two departments in the production process. Each futon requires two direct labor hours in Department A and one hour in Department B. the labor cost is $8 per hour in Department A, and $10 per hour in Department B.
Assuming the amount budgeted to be produced in January is 30,000 units, what is the budgeted direct labor cost for January?
- $840,000
- $810,000
- $540,000
- $780,000
Question 2. Continuing with Fantastic Futons:
Fantastic Futons go through two departments in the production process. Each futon requires two direct labor hours in Department A and one hour in Department B. Labor cost is $8 per hour in Department A and $10 per hour in Department B.
The labor capacity for a normal eight-hour shift for a month is 50,000 direct labor hours each for both Departments A and B. Overtime is paid at time and a half. What would be the budgeted direct labor costs for January, assuming a budgeted production of 30,000 units?
- $420,000
- $780,000
- $820,000
- $900,000
Question 3. Continuing with Fantastic Futons:
Fantastic Futons go through two departments in the production process. Each futon requires two direct labor hours in Department A and one hour in Department B. Labor cost is $8 per hour in Department A and $10 per hour in Department B.
The budgeted manufacturing overhead rate is $5 per direct labor hour. What is the budgeted manufacturing overhead cost for January given a budget production of 30,000 units?
- $450,000
- $150,000
- $300,000
- $330,000
Question 4. Leaverton's forecast of sales is as follows: July, $60,000; August, $90,000; September, $130,000. Sales are normally 80% cash and 20% credit in any month. Credit sales are collected in full in the following month. Merchandise cost averages 60% of the sales price. The company desires an inventory as of September 30 of $52,000. The inventory as of June 30 was $25,000.
Total purchases that must be made in order to meet the sales and inventory requirement for the quarter amount to:
- $141,000
- $195,000
- $307,000
- $253,000