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# 21. Betz Company's sales budget shows the following projections for next year:

Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each quarter is to equal 30% of the next quarter's budgeted unit sales. How many units should be produced during the first quarter?

• a.

24,000

• b.

48,000

• C.

66,000

• d.

72,000

Units produced = Ending inventory + Units sold + Beginning inventory

= (30%

80,000) + 60,000 - 18,000

= 24,000 + 60,000 - 18,000 = 66,000

22. Pooler Corporation is working on its direct labor budget for the next two months. Each unit of output requires 0.15 direct labor-hours. The direct labor rate is \$7.00 per direct labor-hour. The production budget calls for producing 6,500 units in April and 6,200 units in May. The company guarantees its direct labor workers a 40-hour paid work week. With the number of workers currently employed, that means that the company is committed to paying its direct labor work force for at least 1,000 hours in total each month even if there is not enough work to keep them busy. What would be the total combined direct labor cost for the two months?

• a.

\$13,825.00

• b.

\$13,335.00

• C.

\$14,000.00

• d.

\$13,510.00

Direct labor-hours needed for production in April = 0.15 Direct labor-hours needed for production in May = 0.15

6,500 = 975 6,200 = 930

# Even though both months' production needs would require less than 1,000 hours, the company has committed to

paying a minimum of 1,000 hours per month. Total direct labor-hours = 1,000 + 1,000 = 2,000

# Direct labor cost = 2,000

\$7 = \$14,000

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