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Question - EGO Tunes manufactures a Teddy Bear with moving parts and a built-in voice box. Projected sales in units for the next 5 months are as follows:
Month Projected
Sales in Units
January 30,000
February 36,000
March 33,000
April 40,000
May 29,000
Each Teddy Bear requires basic materials that LEGO purchases from a single supplier at $3.50 per Teddy Bear. Voice boxes are purchased from another supplier at $1.00 each. Assembly labor cost is $2.00 per Teddy Bear, and variable overhead cost is $.50 per Teddy Bear. Fixed manufacturing overhead applicable to Teddy Bear production is $12,000 per month. LEGO's policy is to manufacture 1.5 times the coming month's projected sales every other month, starting with January (i.e., odd-numbered months) for February sales, and to manufacture 0.5 times the coming month's projected sales in alternate months (i.e., even-numbered months). This allows LEGO to allocate limited manufacturing resources to other products as needed during the even-numbered months.
Required - Find the unit production budget for Teddy Bear for January?
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