Preparing a Cost of Goods Sold Budget

Andrews Company manufactures a line of office chairs. Each chair takes $14 of direct materials and uses 1.9 direct labor hours at $14 per direct labor hour. The variable overhead rate is $1.20 per direct labor hour and the fixed overhead rate is $1.80 per direct labor hour. Andrews Company expects to produce 20,000 chairs next year and expects to have 730 chairs in ending inventory. There is no beginning inventory of chairs.

Direct Materials $

Direct Labor $

Variable Overhead $

Fixed Overhead $

Total Manufacturing Cost $

Less: Ending Inventory $

Cost of Goods Sold $

Afirm wants to hire a project manager (pm) at a salary of $100,000. 30% of pms have high ability, and 70% of pms have low ability. high ability pms generate $120,000 in revenue and low ability pms generate $80,000 in revenue. in addition to differences in productivity, high and low ability pms have different outside offers. if a high ability pm is not hired by the firm, she can work for another company at a salary of $80,000. if the low ability pm is not hired by the firm, she can work for another company for $70,000. high ability pms are also able to get a project management professional (pmp) certification at a cost of $1,000. low ability pms are unable to get a pmp certification (they would fail the test). the firm is not able to observe a pm’s ability, but is able to observe and verify whether or not the pm has a pmp certificate.(a) draw the extensive form of the game.expert answer