Answer the Following Questions Using the Information Below

question 195

Multiple Choice

Answer the following questions using the information below:
Wallace Company provides the following data for next year:
The gross profit rate is 40% of sales. Inventory at the end of December is $21,600 and target ending inventory levels are 30% of next month's sales, stated at cost.
-Shamokin Manufacturing produces two products, Big and Bigger. Shamokin expects to sell 10,000 units of product Bigger and to have an inventory of 2,000 units of Bigger on hand at the end of the period. Currently, Shamokin has 800 units of Bigger on hand. Bigger requires two labor operations, molding and polishing. Each unit of Bigger requires one hour of molding and two hours of polishing. The direct labor rate for molding is $20 per molding hour and the direct labor rate for polishing is $25 per polishing hour. The expected number of hours of direct labor for Bigger is:

• A)8,800 hours of molding; 17,600 hours of polishing
• B)11,200 hours of molding; 22,400 hours of polishing
• C)17,600 hours of molding; 8,800 hours of polishing
• D)22,400 hours of molding; 11,200 hours of polishing

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