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Accounting Assignment | Custom Assignment Help

On January 1, BM Ltd plans to introduce a product called Bandy Mandy. The company plans to sell each unit of Bandy Mandy for $32. Management has forecast the following in sales units for the first three months:

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January – 35,000

February – 28,000

March – 40,000

Each unit of Bandy Mandy requires 2 kg of Bingaling and 1 hour of direct labour. Management wants to end each month with a Bandy Mandy inventory level equal to 15 per cent of the following month’s sales, and a Bingaling inventory equal to 8 per cent of the following month’s production. Bingaling can be purchased for $4 per kg and direct labour costs are estimated to be $5 per hour. What amount should be budgeted for direct labour in February?

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