Eppes plating company plans to sell 120000 units of a

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Reference no: EM13573650

Eppes Plating Company plans to sell 120,000 units of a certain product line at a price of $6. There are 10,000 units of the product in the inventory at January 1 and the inventory is to be increased 20% during the year. Two types of materials are used to make the product. Four units of Material A each costing 30 cents are required for each unit of product, and two units of Material B costing 40 cents are required for each unit of product. On January 1 there are 10,000 units of Material A in inventory and 5,000 units of Material B. Plans for the year indicate that 12,000 units of Material A and 6,000 units of Material B are to be produced in 15 minutes of direct labor time.

Direct labor is paid at the rate of $8.00 an hour. The variable manufacturing overhead varies at the rate of $.50 per direct labor hour and the fixed manufacturing overhead for the year is estimated at $140,000. Required: a. Prepare a production budget for the year. b. Prepare a materials purchases budget for the year. c. Prepare a labor cost budget for the year. d. Prepare a budget for manufacturing overhead for the year.

Reference no: EM13573650

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