Ginger Corporation makes one product and has provided the following information: a. The budgeted selling price per unit is $89. Budgeted unit sales for August is 8,300 units. b. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. c. The direct labor wage rate is $21.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. d. Manufacturing overhead is entirely variable and is $7.00 per direct labor-hour. Ginger Corp's estimated cost of goods sold for August is closest to: (Round your intermediate calculations to 2 decimal places.)

Question

Business

Camryn Moran

18 May, 15:41

Ginger Corporation makes one product and has provided the following information: a. The budgeted selling price per unit is $89. Budgeted unit sales for August is 8,300 units. b. Each unit of finished goods requires 4 pounds of raw materials. The raw materials cost $2.00 per pound. c. The direct labor wage rate is $21.00 per hour. Each unit of finished goods requires 2.6 direct labor-hours. d. Manufacturing overhead is entirely variable and is $7.00 per direct labor-hour. Ginger Corp's estimated cost of goods sold for August is closest to: (Round your intermediate calculations to 2 decimal places.)

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Answers (1)

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Samantha Spencer · Answer 1

Cost Of Goods Sold $80.8 per unit.

Explanation:

This Cost of Goods sold is calculated assuming there were no opening and ending work in process or finished goods.

Units sold in August 8,300

Raw materials used = 4 * 8300 = 33200 pounds

Cost of Raw materials used = $2 * 33200 = $ 66400

Direct Labor Hours Required = 2.6 * 8,300 = 21580 hours

Direct Labor = $ 21 * 21580 hours = $ 453180

Manufacturing Overhead = $ 7 * 21580 hours = $ 151060

Cost of Goods Sold = $ 66400 + $ 453180+$ 151060 = $ 670640

Cost Of Goods Sold per unit = $ 670640 / 8300 = $80.8