Accounting: What the Numbers Mean 11th Edition by Wayne McManus,Daniel Viele,David Marshall

Exercise 3

Standard product cost In addition to the information presented in Mini-Exercises 14.1 and 14.2, ABC Company currently pays a standard rate of $1 per pound for raw materials. Each unit should be produced in 15 minutes of direct labor time at a standard direct labor rate of $12 per hour. Manufacturing overhead is applied at the standard rate of $16 per direct labor hour.
Required:
Calculate the standard cost per unit for ABC Company.
Reference Mini-Exercise 14.1:
Production budget ABC Company's budgeted sales for June, July, and August are 12,000, 16,000, and 14,000 units, respectively. ABC requires 30% of the next month's budgeted unit sales as finished goods inventory each month. Budgeted ending finished goods inventory for May is 3,600 units.
Required:
Calculate the number of units to be produced in June and July.
Reference Mini-Exercise 14.2:
Purchases budget In addition to the information presented in Mini-Exercise 14.1, each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month's budgeted production as raw material inventory each month.
Required:
Calculate the number of pounds of raw material to be purchased in June.