Black amp decker bampd manufactures a wide variety of tools

Assignment Help Accounting Basics

Reference no: EM13579912

Black & Decker (B&D) manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Use the following fictitious information about this product line to complete the problem requirements. Each handisaw sells for $50. B&D expects the following unit sales.


January	2,300
February	2,400
March	2,800
April	2,900
May	2,200

B&D's ending finished goods inventory policy is 20 percent of the next month's sales.

Suppose each handisaw takes approximately .75 hours to manufacture, and B&D pays an average labor wage of $15.50 per hour.

Each handisaw requires a plastic housing that B&D purchases from a supplier at a cost of $5.00 each. The company has an ending raw materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $4.00 per handisaw.

Manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 24,000 units) and $.90 per unit variable manufacturing overhead. B&D's selling expenses are 4 percent of sales dollars, and administrative expenses are fixed at $15,000 per month.

Requirement 1:

Calculate the sales budget for Black & Decker (B&D) for the first quarter (January, February, and March). Include each month as well as the first quarter.

Reference no: EM13579912

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