Next year's sales forecast shows that 20,000 units of Product A and 22,000 units of Product B are going to be sold for prices of $10 and $12 per unit, respectively. The desired ending inventory of Product A is 20% higher than its beginning inventory of 2,000 units. The beginning inventory of Product B is 2,500 units. The desired ending inventory of Product B is 3,000 units.
-Consider Derek's budget information: Materials to be used total $64,750; direct labor totals $198,400; factory overhead totals $394,800; work in process inventory on January 1 is $189,100; and work in progress inventory on December 31 is $197,600. The budgeted cost of goods manufactured for the year is

Question

Quizplus · Accepted Answer

The budgeted cost of goods manufactured is the sum of the materials to be used, direct labor, and factory overhead. The materials to be used are $64,750, the direct labor is $198,400, and the factory overhead is $394,800. Therefore, the budgeted cost of goods manufactured is $64,750 + $198,400 + $394,800 = $649,450.

Next Year's Sales Forecast Shows That 20,000 Units of Product