Foster Company makes power tools. The sales budget for drills for the first four months of the year is:
Foster has taken a just-in-time approach to production and wants only 5% of the next month's sales needs in ending inventory. January 1 inventory of drills was zero. Each drill takes 15 minutes of direct labor at $18 per hour. The factory overhead formula is $27,000 + $1.20 per direct labor hour.

Question

Foster Company makes power tools. The sales budget for drills for the first four months of the year is:
  Foster has taken a just-in-time approach to production and wants only 5% of the next month's sales needs in ending inventory. January 1 inventory of drills was zero. Each drill takes 15 minutes of direct labor at $18 per hour. The factory overhead formula is $27,000 + $1.20 per direct labor hour.

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The Answer of Foster Company makes power tools. The sales budget for drills for the first four months of the year is:
  Foster has taken a just-in-time approach to production and wants only 5% of the next month's sales needs in ending inventory. January 1 inventory of drills was zero. Each drill takes 15 minutes of direct labor at $18 per hour. The factory overhead formula is $27,000 + $1.20 per direct labor hour.

Foster Company Makes Power Tools