Denver Corporation Has the Following Sales Forecast for the Next

question 55

Multiple Choice

Denver Corporation has the following sales forecast for the next quarter: July, 4,000 units; August, 4,800 units; September, 5,600 units
Sales totaled 3,200 units in June.The June ending finished goods inventory was 800 units.End-of-month finished goods inventory levels are planned to be equal to 30 percent of the next month's planned sales.Records showed that each unit is budgeted at 2 pounds of materials costing $3 per pound.Direct labor was budgeted at .5 direct labor hours per unit at a wage of $20 per hour.Budgeted variable overhead is $1.50 per direct labor hour.Fixed overhead is budgeted at $250,000 for the year, and 50,000 units are expected to be produced.
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The beginning finished inventory is valued at $31,320.
After preparing a finished goods inventory budget for August, what is the cost of goods sold for August?

• A) $104,400
• B) $109,620
• C) $67,860
• D) $140,940

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