Question

JTS Corp had the following production budget:

1st Quarter 2019 8.000 units
2nd Quarter 2019 9,000 units

Each unit requires 4 pounds of raw materials at $2 per pound. JTS wants a raw materials inventory of 40% of the next months raw materials (the same percentage was used in 2018). The raw materials budget for the first quarter of 2019 is _______________. (no dollar signs, commas or decimals)   

Shadwell Company has budgeted the following unit sales:

1^st Quarter 2019                        10.000 units
2^nd Quarter 2019                       7,000 units

It also had the following production budget:

1st Quarter 2019 12,000 units
2nd Quarter 2019 8,000 units

Each unit requires 6 pounds of raw materials at $3 per pound. Each unit requires 1.5 hours of direct labor at $20 per hour. Manufacturing overhead is 60% of direct labor cost.

Cost of goods sold for Shadwell Company for the 2nd quarter is ____________. (no dollar signs, commas nor decimals).

Answer 1

JTS Corp Direct Material Budget For the Quarter ended 1st Quarter Quarter 1st Quarter 2nd Quarter Required Production - a 8000 9000 Units raw materials required per unit of finished good - b Cost per lb Raw materials needed to meet Production c = a*b 32000 36000 lbs Desired Ending inventory of raw material d= next month production* 40% 14400 Total raw material required (e = c+d) 46400 less : Beginning inventory = f 3200 Direct Material Purchases g = e-f 43200 Unit cost per lb = h Total budgeted direct material cost (i = g*h) 86400 Shade well Company Cost of goods sold Direct Material (7000*6*$3) Direct Labor(7000*1.5*$20) Manufacturing Overhead (60% of Direct labor) Cost of goods Sold 2nd Quarter 126000 $ 210000 $ 126000 $ 462000$

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