A company determined that the budgeted cost of producing a product is $30 per unit.On June 1, there were 80,000 units on hand, the sales department budgeted sales of 300,000 units in June, and the company desires to have 120,000 units on hand on June 30.The budgeted cost of goods manufactured for June would be
A)$7,800,000.
B)$11,400,000.
C)$9,000,000.
D)$10,200,000.

Question

Quizplus · Accepted Answer

The budgeted cost of goods manufactured is calculated by determining the number of units to be produced and multiplying by the cost per unit. The company needs to produce enough units to cover sales and desired ending inventory, minus beginning inventory: (300,000 sales + 120,000 ending inventory - 80,000 beginning inventory) = 340,000 units to be produced. At $30 per unit, the cost is 340,000 * $30 = $10,200,000.

A Company Determined That the Budgeted Cost of Producing a Product