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Business, 13.11.2019 23:31 saraderrico
Lowell company makes and sells artistic frames for pictures. the controller is responsible for preparing the master budget and has accumulated the following information for 2017.
january
february
march
april
may
estimated unit sales 10,400 11,100 8,000 9,000 8,600
sales price per unit $50.80 $47.90 $47.90 $47.90 $47.90
direct labor hours per unit 2.3 2.3 1.6 1.6 1.6
wage per direct labor hour $7.00 $7.00 $7.00 $8.00 $8.00
lowell has a labor contract that calls for a wage increase to $8.00 per hour on april 1. new labor-saving machinery has been installed and will be fully operational by march 1.
lowell expects to begin the year with 15,950 frames on hand and has a policy of carrying an end-of-month inventory of 100% of the following month’s sales, plus 50% of the second following month’s sales.
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