Question

Fredericksen Corporation makes one product and has provided the following information: Budgeted sales, February 8,700 units Raw materials requirement per unit of output 6 pounds Raw materials cost $ 2.00 per pound Direct labor requirement per unit of output 2.9 direct labor-hours Direct labor wage rate $ 21.00 per direct labor-hour Predetermined overhead rate (all variable) $ 10.00 per direct labor-hour Variable selling and administrative expense $ 1.10 per unit sold Fixed selling and administrative expense $ 80,000 per month The estimated cost of goods sold for February is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

COGS= $886,530

Explanation:

First, we need to calculate the unitary production cost:

unitary production cost= direct material + direct labor + allocated overhead

unitary production cost= (6*2) + (2.9*21) + (2.9*10)

unitary production cost= $101.9

Now, the cost of goods sold:

COGS= number of units sold*unitary production cost

COGS= 8,700*101.9

COGS= $886,530