Reference no: EM132604802

Question 1: How what to determine the Added Desired Ending Finished Good Units and Less Beginning Finished Good Units.

Lowell Company makes and sells artistic frames for pictures. The controller is responsible for preparing the master budget and has accumulated the following information for 2020.

Estimated unit sales

10,300 January

11,600 February

9,000 March

8,300 April

8,000 May

Sales price per unit

$50.30 January

$48.70 February

$48.70 March

$48.70 April

$48.70 May

Direct labor hours per unit

2.3 January

2.3 February

1.6 March

1.6 April

1.6 May

Wage per direct labor hour

$8 January

$8 February

$8 March

$9 April

$9 May

• Lowell has a labor contract that calls for a wage increase to $9 per hour on April 1. New labor-saving machinery has been installed and will be fully operational by March 1.
• Lowell expects to begin the year with 16,100 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month's sales, plus 50% of the second following month's sales.