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Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7291
Experience:  Post Graduate Diploma in Management (MBA)
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Customer Question 1. Favata Company has the following information:

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Customer Question

1. Favata Company has the following information:
Month Budgeted Sales
June $60,000
July 51,000
August 40,000
September 70,000
October 72,000
In addition, the cost of goods sold rate is 70% and the desired inventory level is 30% of next month's cost of sales.
Prepare a purchases budget for July through September.

2. XXXXX XXXXX, the president of Ross's Wild Game Company, has asked for information about the cost behavior of manufacturing overhead costs. Specifically, he wants to know how much overhead cost is fixed and how much is variable. The following data are the only records available:
Month Machine-hours Overhead Costs
February 1,700 $20,500
March 2,800 22,250
April 1,000 19,950
May 2,500 21,500
June 3,500 23,950

Using the high-low method, determine the overhead cost equation. Use machine-hours as your cost driver.

3. Kirkland Company manufactures a part for use in its production of hats. When 10,000 items are produced, the costs per unit are:
Direct materials $0.60
Direct manufacturing labor 3.00
Variable manufacturing overhead 1.20
Fixed manufacturing overhead 1.60
Total $6.40

Mike Company has offered to sell to Kirkland Company 10,000 units of the part for $6.00 per unit. The plant facilities could be used to manufacture another item at a savings of $9,000 if Kirkland accepts the offer. In addition, $1.00 per unit of fixed manufacturing overhead on the original item would be eliminated.

a. What is the relevant per unit cost for the original part?
b. Which alternative is best for Kirkland Company? By how much?

Welcome and Thanks for asking your question. I am working on it and will post the solution soon.
Customer: replied 4 years ago.

Thank you. I have about 40 minutes on a timed assignment to complete these answers.

Customer: replied 4 years ago.

Will do. Thank you, Linda.

I should be done before that.
Customer: replied 4 years ago.



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Customer: replied 4 years ago.

For the purchase budget, only the highlighted is the actual purchase budget correct? Should I include the working notes?


Yes only the highlighted is the actual purchase budget.

I am not sure if you need to show working depends upon you instructor.
Customer: replied 4 years ago.

Ok, thank you.

You are welcome.

If you need any help in future feel free to request me by writing "FOR LINDA" at start of your post.