Solution-Sandoval maintains an ending finished goods

Sandoval maintains an ending finished goods inventory

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Reference no: EM131810838

Sandoval Furniture builds high-end hand-made dining tables. Mackenzie Sandoval, the company's owner, has developed the following sales forecast for 2015.

1st Quarter	2nd Quarter	3rd Quarter	4th Quarter
Forecasted sales (tables)	2,596	2,736	2,980	2,320

Because of the time needed to create each table, Sandoval maintains an ending Finished Goods Inventory of 20 percent of the following quarter's budgeted sales. Sandoval has been following this inventory policy for several years. The company ended 2014 with 519 tables on hand.

The standard cost card for a table is as follows:

Standard Quantity	Standard Price		Total Standard Cost
American cherry wood	25 board feet		$5/board foot	$125
American cherry turning square (legs)	4 squares	$9/square	36
Direct labor	12 DLH	$15/DLH	180
Variable overhead	12 DLH	$55/DLH	660
Fixed overhead	12 DLH	$10/DLH	120

Prepare Sandoval's production budget for 2015. Assume that the desired ending inventory for 2015 is 536 tables. (Round answers to 0 decimal places, e.g. 5,250.)

Reference no: EM131810838

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Sandoval maintains an ending finished goods inventory

Reference no: EM131810838

Reference no: EM131810838

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