1. preston, inc., manufactures wooden shelving units for collecting and sorting mail. the company expects to produce 480 units in july and 400 units in august. each unit requires 10 feet of wood at a cost of $1.50 per foot. preston wants to always have 300 feet of wood on hand in materials inventory. compute preston’s raw materials purchases budget for july and august. july augustbudgeted raw materials purchases $ $2. preston, inc., manufactures wooden shelving units for collecting and sorting mail. the company expects to produce 480 units in july and 400 units in august. each unit requires 1.75 hours of direct labor, and labor wages average $9 per hour. compute preston’s direct labor budget for july and august. july augustbudgeted direct labor cost $ $

Exercise 6-2 variable costing income statement; explanation of difference in net operating income [lo6-2] ida sidha karya company is a family-owned company located on the island of bali in indonesia. the company produces a handcrafted balinese musical instrument called a gamelan that is similar to a xylophone. the gamelans are sold for $970. selected data for the company’s operations last year follow: units in beginning inventory 0 units produced 200 units sold 180 units in ending inventory 20 variable costs per unit: direct materials $ 130 direct labor $ 300 variable manufacturing overhead $ 30 variable selling and administrative $ 15 fixed costs: fixed manufacturing overhead $ 63,000 fixed selling and administrative $ 25,000 the absorption costing income statement prepared by the company’s accountant for last year appears below: sales $ 174,600 cost of goods sold 139,500 gross margin 35,100 selling and administrative expense 27,700 net operating income $ 7,400 required: 1. under absorption costing, how much fixed manufacturing overhead cost is included in the company's inventory at the end of last year? 2. prepare an income statement for last year using variable costing.