1. Merchant Co. expects to sell 10,000 units at $120 each. Eachunit is expected to require 2lbs. of material @ $10/lb. and 3direct labor hours @ $5/DLH. The overhead rate is estimated to be$15/DLH. The beginning inventories are: DM 1,000 lbs. and FinishedGoods 2,000 units. The budgeted ending inventories are: DM 2,000lbs. and Finished Goods 1,000 units.
What is Merchant Co's budgeted sales (in $)?
What is Merchant Co's budgeted production (in units)?
Assuming a production of 9,500 units, what is the budgetedmaterials purchase (in lbs.& $)?
Based on your answer to (2), what is the budgeted cost perunit?
Based on your answer to (2), what is the budgeted cost of goodssold?
Based on your answer to (2), what is the budgeted cost for DL& FOH respectively?
Problem 2
Country Heather manufactures flower pots. It expects to sell26,000 pots in 2014. The company had enough beginning inventory ofdirect materials to produce 8,000 pots and wants to maintain anending direct materials inventory to produce 12,000 pots. Beginninginventory of finished pots totaled 2,000 pots and the company had adesired ending inventory of finished pots of 3,000 pots. The potssell for $12 each. Direct material cost is $2.50 per pot, directlabor cost is $1.35 per pot, and factory overhead is 85¢ perpot.
Determine the budgeted sales for 2014 (in $)
Determine the budgeted production for 2014 (in pots)
Determine the budgeted cost of goods sold for 2014 (in $)
Determine the budgeted cost for DM, DL, & FOH for 2014.
Problem 3
Maddox Co's forecast of sales is as follows: October $40,000;November $80,000; December $120,000. Sales are 70% cash and 30%credit in any month. Credit sales are collected in full in thefollowing month.
Determine the budgeted cash receipts for each of the 3months?
Calculate the balance of Accounts Receivable on October 31 &November 30?
1. Merchant Co. expects to sell 10,000 units at $120 each. Eachunit is expected to require 2lbs. of material @ $10/lb. and 3direct labor hours @ $5/DLH. The overhead rate is estimated to be$15/DLH. The beginning inventories are: DM 1,000 lbs. and FinishedGoods 2,000 units. The budgeted ending inventories are: DM 2,000lbs. and Finished Goods 1,000 units.
What is Merchant Co's budgeted sales (in $)?
What is Merchant Co's budgeted production (in units)?
Assuming a production of 9,500 units, what is the budgetedmaterials purchase (in lbs.& $)?
Based on your answer to (2), what is the budgeted cost perunit?
Based on your answer to (2), what is the budgeted cost of goodssold?
Based on your answer to (2), what is the budgeted cost for DL& FOH respectively?
Problem 2
Country Heather manufactures flower pots. It expects to sell26,000 pots in 2014. The company had enough beginning inventory ofdirect materials to produce 8,000 pots and wants to maintain anending direct materials inventory to produce 12,000 pots. Beginninginventory of finished pots totaled 2,000 pots and the company had adesired ending inventory of finished pots of 3,000 pots. The potssell for $12 each. Direct material cost is $2.50 per pot, directlabor cost is $1.35 per pot, and factory overhead is 85¢ perpot.
Determine the budgeted sales for 2014 (in $)
Determine the budgeted production for 2014 (in pots)
Determine the budgeted cost of goods sold for 2014 (in $)
Determine the budgeted cost for DM, DL, & FOH for 2014.
Problem 3
Maddox Co's forecast of sales is as follows: October $40,000;November $80,000; December $120,000. Sales are 70% cash and 30%credit in any month. Credit sales are collected in full in thefollowing month.
Determine the budgeted cash receipts for each of the 3months?
Calculate the balance of Accounts Receivable on October 31 &November 30?
Related questions
1) Fantastic Futons manufactures futons. The estimated number offuton sales for the first three months of 2010 are asfollows:
| January | 40,000 |
| February | 50,000 |
| March | 60,000 |
2) Fantastic Futons manufactures futons. The estimated number offuton sales for the first three months of 2010 are asfollows:
| January | 40,000 |
| February | 50,000 |
| March | 60,000 |
3) Fantastic Futons goes through two departments in the productionprocess. Each futon requires two direct labor hours in Department Aand one hour in Department B. Labor cost is $8 per hour inDepartment A and $10 per hour in Department B.Assumingthe amount budgeted to be produced in January is 30,000 units, whatis the budgeted direct labor cost for January?
4) The projections of direct materials purchases that follow arefor the Sombo Corporation.
Purchases on Account | Cash Purchases | |
| December | $40,000 | $30,000 |
| January | 60,000 | 33,000 |
| February | 50,000 | 35,000 |
| March | 70,000 | 25,000 |
5) Fallgatter, Inc., expects to sell 17,500 units. Each unit requires3 pounds of direct materials at $12 per pound and 2 direct laborhours at $10 per direct labor hour. The overhead rate is $8 perdirect labor hour. The beginning inventories are as follows: directmaterials, 2,000 pounds; finished goods, 2,500 units. The plannedending inventories are as follows: direct materials, 5,600 pounds;finished goods, 3,000 units.Givena planned production of 10,000 units, what are the planned directmaterials purchases?
6) Leaverton's forecast of sales is as follows: July, $60,000;August, $90,000; September, $130,000. Sales are normally 80 percentcash and 20 percent credit in any month. Credit sales are collectedin full in the following month. Merchandise cost averages 60percent of sales price. The company desires an inventory as ofSeptember 30 of $52,000. The inventory as of June 30 was$25,000.Totalcash receipts for August will be
PLEASE ANSWER ALL QUESTIONS FOR EACH SECTION FOR #7,8,9,10; THE ANSWER FOR THOSE QUESTIONS ARE FROM SECTIONS1,2,3,4,5,6. Answer them correctly and take your time and fill ineach section where it needs an answer. Please help.
[The following information applies to the questionsdisplayed below.]
The management of Zigby Manufacturing prepared the followingestimated balance sheet for March, 2015: |
| ZIGBY MANUFACTURING Estimated Balance Sheet March 31, 2015 | |||||
| Assets | |||||
| Cash | $ | 99,000 | |||
| Accountsreceivable | 500,250 | ||||
| Raw materialsinventory | 101,000 | ||||
| Finished goodsinventory | 402,500 | ||||
| Total current assets | 1,102,750 | ||||
| Equipment,gross | 618,000 | ||||
| Accumulateddepreciation | (159,000) | ||||
| Equipment, net | 459,000 | ||||
| Total assets | $ | 1,561,750 | |||
| Liabilities and Equity | |||||
| Accountspayable | 209,700 | ||||
| Short-term notes payable | 21,000 | ||||
| Total current liabilities | $ | 230,700 | |||
| Long-term notepayable | 505,000 | ||||
| Total liabilities | 735,700 | ||||
| Common stock | 344,000 | ||||
| Retainedearnings | 482,050 | ||||
| Total stockholdersâ equity | 826,050 | ||||
| Total liabilitiesand equity | $ | 1,561,750 | |||
To prepare a master budget for April, May, and June of 2015,management gathers the following information. |
| a. | Sales for March total 23,000 units. Forecasted sales in unitsare as follows: April, 23,000; May, 19,000; June, 18,800; July,23,000. Sales of 249,000 units are forecasted for the entire year.The productâs selling price is $29.00 per unit and its totalproduct cost is $25.00 per unit. |
| b. | Company policy calls for a given monthâs ending raw materialsinventory to equal 50% of the next monthâs materials requirements.The March 31 raw materials inventory is 5,050 units, which complieswith the policy. The expected June 30 ending raw materialsinventory is 4,500 units. Raw materials cost $20 per unit. Eachfinished unit requires 0.50 units of raw materials. |
| c. | Company policy calls for a given monthâs ending finished goodsinventory to equal 70% of the next monthâs expected unit sales. TheMarch 31 finished goods inventory is 16,100 units, which complieswith the policy. |
| d. | Each finished unit requires 0.50 hours of direct labor at a rateof $24 per hour. |
| e. | Overhead is allocated based on direct labor hours. Thepredetermined variable overhead rate is $3.60 per direct laborhour. Depreciation of $24,320 per month is treated as fixed factoryoverhead. |
| f. | Sales representativesâ commissions are 10% of sales and are paidin the month of the sales. The sales managerâs monthly salary is$3,900. |
| g. | Monthly general and administrative expenses include $10,000administrative salaries and 0.8% monthly interest on the long-termnote payable. |
| h. | The company expects 25% of sales to be for cash and theremaining 75% on credit. Receivables are collected in full in themonth following the sale (none is collected in the month of thesale). |
| i. | All raw materials purchases are on credit, and no payables arisefrom any other transactions. One monthâs raw materials purchasesare fully paid in the next month. |
| J. | The minimum ending cash balance for all months is $110,000. Ifnecessary, the company borrows enough cash using a short-term noteto reach the minimum. Short-term notes require an interest paymentof 1% at each month-end (before any repayment). If the ending cashbalance exceeds the minimum, the excess will be applied to repayingthe short-term notes payable balance. |
| K. | Dividends of $19,000 are to bedeclared and paid in May. |
| l. | No cash payments for income taxes are to be made during thesecond calendar quarter. Income tax will be assessed at 40% in thequarter and paid in the third calendar quarter. |
| m. | Equipment purchases of $139,000 are budgeted for the last day ofJune. |
| Required: |
Prepare the following budgets and other financial information asrequired. All budgets and other financial information should beprepared for the second calendar quarter, except as otherwise notedbelow. Round calculations up to the nearest whole dollar, exceptfor the amount of cash sales, which should be rounded down to thenearest whole dollar: |
| 1. SALES BUDGET
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5. | Factory overhead budget.
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