Marshell Ltd produces a subassembly used in the production of forklifts
Marshell Ltd produces a subassembly used in the production of forklifts. The assembly is sold to engine manufacturers and forklift maintenance facilities. The company is completing its fifth year of operations and is preparing to build its master budget for the coming year (2018). The master budget will be based on the following information: The finished goods inventory was 64 000 units at 31 December 2017, each costing $332.12. The desired ending inventory for each month is 80% of the next month’s sales. The data on materials used are as follows: Direct material Per-unit usage Unit cost ($) Metal 20 kg 16 Components 12 components 10 Inventory policy dictates that sufficient materials be on hand at the end of the…
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