Stumble Inc

question 3

Multiple Choice

Stumble Inc. plans to sell 100,000 units in March and 140,000 units in April. Stumble Inc.'s policy is that 15% of the following month's sales must be in ending inventory. On March 1, 13,400 units were in inventory.
It takes 15 minutes of direct labour time to make one unit. Direct labour wages average $20 per hour. Variable overhead is applied at the rate of $3 per direct labour hour. Fixed overhead is budgeted at $44,500 per month.
-Refer to the Figure.What is the budgeted overhead for March?

• A)$44,500
• B)$48,420
• C)$80,700
• D)$125,200

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Definitions:

Purchase Requisitions

An internal document used in a business to request the procurement department to order goods or services.

Payroll Checks

Payments made to employees representing wages earned during a pay period.

Investment Turnover

A measure of the efficiency of a company in using its investments to generate sales revenue.

Sales Dollar

Refers to the total monetary value of all sales transactions within a given period.