accounting-Meyer Company manufactures a single product.
Meyer Company manufactures a single product. The company is in the process of preparing its 2006 master budget and has the following information available:a. The January 1, 2006 balance sheet for the company is as follows:ASSETSLIABILITIES & EQUITYCash$20,000Accounts Payable$84,300Accounts Receivable100,000Common Stock250,000Raw Material Inventory13,200Retained Earnings104,900Finished Goods Inventory26,000Total$439,200Equipment460,000Accum Depreciation(180,000)Total$439,200b. The company expects to produce 55,000 units in January, 2006; 58,000 unitsin February, 2006; and 52,000 units in March, 2006.c. Raw materials inventory at January 1, 2006 consisted of 16,500 pounds. Eachunit requires 3 pounds of raw materials. This raw material is purchased for $0.80 per pound. The ending inventory of raw materials should be 10% of the next months production needs.d. Direct labor costs are budgeted at $38,000 for January, 2006 and $18,000 forFebruary, 2006.e. Manufacturing overhead is budgeted at $45,000 for January, 2006 and $45,000 for February, 2006. These amounts include depreciation of $3,000 per month.f. Finished goods inventory at February 28, 2006 is expected to be $39,000.g. Assume there is no beginning or ending work-in-process inventory.Calculate the budgeted cost of goods sold for the two month period, January – February 2006.
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