Question 4.
(9 marks)
Elton, Inc., expects to sell 6,000 ceramic vases for $20 each. Direct materials costs are $2, direct
manufacturing labor is $10, and manufacturing overhead is $3 per vase.
The following inventory levels apply to 2016:
Beginning inventory Ending inventory
Direct materials
1,000 units
1,000 units
Work-in-process inventory
0 units
0 units
Finised goods inventory
400 units
500 units
REQUIRED:
(a) What amount will be reported for sales on the 2016 budgeted income statement? (2 marks).
(b) How many ceramic vases should be produced in 2016? (2 marks).
(c) What amount will be reported for cost of goods sold on the 2016 budgeted income statement? (2 marks).
(d) What are the 2016 budgeted production costs for direct materials, direct manufacturing labor, and
manufacturing overhead, respectively? (3 marks)