Question

MC Qu. 149 Trago Company manufactures... Trago Company manufactures a single product and has a JIT policy that ending inventory must equal 30% of the next month's sales. It estimates that May's ending inventory will consist of 85,500 units. June and July sales are estimated to be 285,000 and 295,000 units, respectively. Trago assigns variable overhead at a rate of $2.30 per unit of production. Fixed overhead equals $405,000 per month. Compute the number of units to be produced and use this amount to compute the total budgeted overhead that would appear on the factory overhead budget for the month of June.

Answer 1

$1067400

Step-by-step explanation:

The computation of the number of units and factory overhead is given below:

units to be produced in june is

= ending inventory + sales - beginning inventory

= (30% of 295000) + 285000 - 85500

= 288000 Units

Now

Overheads budgeted for june

= variable overheads + fixed overheads

= (288000 × 2.3) + 405000

= 662400+405000

= $1067400