Buckeyes Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation: The Marketing Department has estimated sales as follows for the remainder of the year (in units): July . . . . . . . . . . . . . . . . . . . 80,000 October . . . . . . . . . . . . . . . . . 50,000 August . . . . . . . . . . . . . . . . . 70,000 November . . . . . . . . . . . . . . . 40,000 September . . . . . . . . . . . . . . 60,000 December . . . . . . . . . . . . . . . 30,000 a. The selling price of the beach umbrellas is $28 per unit. b. The company maintains finished goods inventories equal to 20% of the following month's sales. This requirement will be met at the end of June. c. Each beach umbrella requires 6 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 40% of the following month's production needs. This requirement will be met at the end of June. Gilden costs $1.80 per foot. d. Each unit requires 0.4 direct labor-hours and direct laborers are paid $15.00 per hour. e. The variable manufacturing overhead rate is $2.50 per direct labor-hour. The fixed manufacturing overhead is $70,000 per month.
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Buckeyes Company manufactures beach umbrellas. The company is preparing detailed budgets for the thi...
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