Question

Gusler Corporation makes one product and has provided the following information: Budgeted sales, May 9,500 units Raw materials requirement per unit of output 2 pounds Raw materials cost $ 2.00 per pound Direct labor requirement per unit of output 2.7 direct labor-hours Direct labor wage rate $ 20.00 per direct labor-hour Predetermined overhead rate (all variable) $ 10.00 per direct labor-hour The estimated cost of goods sold for May is closest to:

Answer 1

COGS= $807,500

Step-by-step explanation:

First, we need to calculate the unitary cost for direct material, direct labor, and manufacturing overhead:

direct material= 2*2= $4

direct labor=2.7*20= $54

overhead= 2.7*10= $27

Total unitary cost= $85

Now, the cost of goods sold:

COGS= 85*9,500= $807,500