How to Calculate Budgeted Cost of Goods Sold
What is the budgeted cost of goods sold for June based on the given data?
A company determined that the budgeted cost of producing a product is $30 per unit. On June 1, there were 77000 units on hand, the sales department budgeted sales of 270000 units in June, and the company desires to have 90000 units on hand on June 30. The options are:
- $10410000
- $8490000
- $7710000
- $8100000
Answer:
The correct answer is $7410000. Budgeted cost of goods sold = Change in units on hand * Budgeted cost per unit
The budgeted cost of goods sold for June can be calculated by considering the units on hand at the beginning of the month, the units to be sold, and the desired units on hand at the end of the month.
Given the following data:
- Units on hand on June 1: 77000 units
- Budgeted sales for June: 270000 units
- Desired units on hand on June 30: 90000 units
To calculate the budgeted cost of goods sold, we need to find the change in the number of units on hand.
Change in units on hand:(Units on hand at the beginning + Budgeted sales) - Desired units on hand at the end
= (77000 + 270000) - 90000 = 247000 units
Next, we multiply the change in units by the budgeted cost per unit ($30) to get the budgeted cost of goods sold.
Budgeted cost of goods sold:= Change in units on hand * Budgeted cost per unit
= 247000 * $30 = $7410000
Therefore, the correct answer is $7410000.