Step 1: Sales Budget Instructions: Provided below is the expected selling price
ID: 2335347 • Letter: S
Question
Step 1: Sales Budget
Instructions: Provided below is the expected selling price and expected unit sales for the four quarter of 2017. Use this information to complete the sales budget.
Expected selling price: $88.00
Expected sales volume (in units):
Quarter 1 1,800 Quarter 2 1,700 Quarter 3 2,300 Quarter 4 2,800
Buff Company
Sales Budget Sales Budget
For the year ending December 31, 2017
Expected unit sales Quarter 1_________
Quarter 2_________
Quarter 3_________
Quarter 4_________
Unit selling price Quarter 1_________
Quarter 2_________
Quarter 3_________
Quarter 4_________
Total sales Quarter 1_________
Quarter 2_________
Quarter 3_________
Quarter 4_________
Step 2: Production Budget
Buff Company expects to meet future sales requirements by maintaining an ending inventory equal to 60%
of the next quarter's budgeted sales volume. Use this and the information below to complete the Production Budget
Ending finished goods inventory on december 31, 2016 $1,000
Expected sale volume for quarter 1 of year 2018: $2,500
Buff Company
Production BuSales Budget
For the year ending December 31, 2017
Expected unit sales Q1 1,800 Q2 1,700 Q3 2,300 Q4 2,800
Add: Desired ending finished goods units Q1_________ Q2_________ Q3_________ Q4_________
Total required units Q1_________ Q2_________ Q3_________ Q4_________
Less: Beginning finished goods Units Q1_________ Q2_________ Q3_________ Q4_________
Required production units Q1_________ Q2_________ Q3_________ Q4_________
Step 3: Direct Materials Budget
Buff Company maintains an ending inventory equal to20%
of the next quarter's production requirements. Use this and the
information below to prepare the Direct Materials Budget.
Number of pounds of direct materials required for each product 1.50
Expected cost per pound $1.00
Beginning inventory of direct materials for quarter 1 of 2017 in pounds: 1,400
Desired ending inventory of direct materials for quarter 4 of 2017 in pounds: 1,800
Buff Company
Direct Materials Sales Budget
For the year ending December 31, 2017
Units to be produced Q1_________ Q2_________ Q3_________ Q4_________
Direct materials per unit Q1_________ Q2_________ Q3_________ Q4_________
Total pounds needed for production Q1_________ Q2_________ Q3_________ Q4_________
Add: Desired ending direct materials (pounds) Q1_________ Q2_________ Q3_________ Q4_________
Total materials required Q1_________ Q2_________ Q3_________ Q4_________
Less: Beginning direct materials (pounds) Q1_________ Q2_________ Q3_________ Q4_________
Direct materials purchases Q1_________ Q2_________ Q3_________ Q4_________
Cost per pound Q1_________ Q2_________ Q3_________ Q4_________
Total cost of direct materials purchases Q1_________ Q2_________ Q3_________ Q4_________
Step 4: Direct Labor Budget
Use the information below to prepare the Direct Labor Budget.
Number of direct labor hours required to produce each unit of finished goods 2.50
Expected cost per direct labor hour $12.00
Buff Company
Direct Labor Bud Sales Budget
For the year ending December 31, 2017
Units to be produced
Q1_________ Q2_________ Q3_________ Q4_________
Direct labor time (hours) per unit
Q1_________ Q2_________ Q3_________ Q4_________
Total required direct labor hours
Q1_________ Q2_________ Q3_________ Q4_________
Direct labor cost per hour
Q1_________ Q2_________ Q3_________ Q4_________
Total direct labor cost
Q1_________ Q2_________ Q3_________ Q4_________
Step 5: Manufacturing Overhead Budget
Buff Company expects variable overhead costs to fluctuate with production volume according to the following rates:
Indirect materials: $0.90 per direct labor
Indirect labor: $1.70 per direct labor
Utilities: $0.30 per direct labor
Maintenance: $0.10 per direct labor
Buff Company also incurs fixed overhead costs. The amounts of fixed overhead costs are already provided in the budget below. Use this information to complete the manufacturing overhead budget.
Buff Company
Manufacturing Ov Sales Budget
For the year ending December 31, 2017
Variable costs
Indirect materials ($0.90/hour)
Q1_________ Q2_________ Q3_________ Q4_________
Indirect labor ($1.70/hour)
Q1_________ Q2_________ Q3_________ Q4_________
Utilities ($0.30/hour)
Q1_________ Q2_________ Q3_________ Q4_________
Maintenance ($0.10/hour)
Q1_________ Q2_________ Q3_________ Q4_________
Total variable costs
Q1_________ Q2_________ Q3_________ Q4_________
Fixed costs
Supervisory salaries Q1 $37,600 Q2 $37,600 Q3 $37,600 Q4 $37,600 Total in a year $150400
Depreciation Q1 $2,900 Q2 $2,900 Q3 $2,900 Q4 $2,900 Total in a year $11600
Property taxes and insurance Q1 $1,600 Q2 $1,600 Q3 $1,600 Q4 $1,600 Total in a year $6,400
Maintenance Q1 $3,400 Q2 $3,400 Q3 $3,400 Q4 $3,400Total in a year $13,600
Total fixed costs
Q1_________ Q2_________ Q3_________ Q4_________
Total manufacturing overhead
Q1_________ Q2_________ Q3_________ Q4_________
Direct labor hours
Q1_________ Q2_________ Q3_________ Q4_________
Using the yearly amounts, what is the annual budgeted overhead rate per direct labor hour?
Step 6: Selling and Administrative Expense Budget
Buff Company expects variable selling and administrative expenses to fluctuate with unit sales volume according to the following rates:
Sales commission $3.60 per unit sold
Freight-out: $2.80 per unit sold
Buff Company also incurs fixed selling and administrative expenses. The amounts of fixed selling and administrative expenses are already provided in the budget below. Use this information to complete the selling and admin. expense budget
Buff Company
Selling and Admi Sales Budget
For the year ending December 31, 2017
Budgeted sales in units Q1 1,800 Q2 1,700 Q3 2,300 Q4 2,800 Total in a year 8,600
Variable expenses
Sales commissions ($3.60 per unit)
Q1_________ Q2_________ Q3_________ Q4_________
Freight-out ($2.80 per unit)
Q1_________ Q2_________ Q3_________ Q4_________
Total variable expenses
Q1_________ Q2_________ Q3_________ Q4_________
Fixed expenses
Advertising Q1 $3,200 Q2 $3,200 Q3 $3,200 Q4 $3,200 Total in a year $12,800
Sales salaries Q1 $13,600 Q2 $13,600 Q3 $13,600 Q4 $13,600 Total in a year $54,400
Office salaries Q1 $7,000 Q2 $7,000 Q3 $7,000 Q4 $7,000 Total in a year $28,000
Depreciation Q1 $800 Q2 $800 Q3 $800 Q4 $800 Total in a year $3,200
Property taxes and insurance Q1 $1,000 Q2 $1,000 Q3 $1,000 Q4 $1,000 Total in a year $4,000
Total fixed expenses
Q1_________ Q2_________ Q3_________ Q4_________
Total selling and administrative expenses
Q1_________ Q2_________ Q3_________ Q4_________
Step 7: Budgeted Income Statement
Complete the following schedule to determine the cost of goods sold:
Cost to produce one product
Direct materials Quantity 1.50 Unit cost $1.00
Direct labor Quantity 2.50 Unit cost $12.00
Manufacturing overhead Quantity 2.50
Total unit cost _________
Cost of goods sold
Total Unit cost × Number of units budgeted to be sold during 2017
= Budgeted Cost of Goods Sold________
Additional information:
Interest expense for 2017: $1,000
Income tax expense for 2017: $16,500
Use the information above as well as data from the other operating budgets to complete the Budgeted Income Statement
Buff Company
Budgeted Income Statement
For the Year Ending December 31, 2017
Sales________
Cost of goods sold_______
Gross profit_______
Selling and administrative expenses______
Income from operations________
Interest expense______
Income before income taxes______
Income tax expense_______
Net income_______
Explanation / Answer
Buff company
Sales Budget
For the year ending december 31 2017
Quarter 1
1800
Quarter 2
1700
Quarter 3
2300
Quarter 4
2800
Unit selling price
Quarter 1
$88
Quarter 2
$88
Quarter 3
$88
Quarter 4
$88
Total sales
Quarter 1
158400
Quarter 2
149600
Quarter 3
202400
Quarter 4
246400
Step 02
Q1
Q2
Q3
Q4
Expected unit sales
1800
1700
2300
2800
Add: Desired ending finished goods
1020
1380
1680
1500
2820
3080
3980
4300
Less: Desired opening inventory
-1080
-1020
-1380
-1680
Required production units
1740
2060
2600
2620
(1800*60%=1080)
Step 03
Direct Materials budget
Q1
Q2
Q3
Q4
Units to be produced
1740
2060
2600
2620
Direct Material per unit
1.5
1.5
1.5
1.5
Total pounds needed for production
2610
3090
3900
3930
Add: Desired ending direct Materials
618
780
786
1000
Total Materials required
3228
3870
4686
4930
Less: beginning direct Materials
-1400
-618
-780
-786
Direct Materials purchase
1828
3252
3906
4144
Cost per pound
$1
$1
$1
$1
cost of direct Material purchase
$1,828
$3,252
$3,906
$4,144
Step 04
Direct labor budget
Q1
Q2
Q3
Q4
Units to be produced
1740
2060
2600
2620
Direct labor time per unit
2.5
2.5
2.5
2.5
Total direct labor hours
4350
5150
6500
6550
Direct cost labour hour
$12
$12
$12
$12
Total labour cost
$52,200
$61,800
$78,000
$78,600
As per chegg policy only first four parts is answered when there more than 4 subparts
Buff company
Sales Budget
For the year ending december 31 2017
Quarter 1
1800
Quarter 2
1700
Quarter 3
2300
Quarter 4
2800
Unit selling price
Quarter 1
$88
Quarter 2
$88
Quarter 3
$88
Quarter 4
$88
Total sales
Quarter 1
158400
Quarter 2
149600
Quarter 3
202400
Quarter 4
246400
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