1. Projected units sales: July, 140,000; August 150,000; September 170,000; Octo
ID: 2444458 • Letter: 1
Question
1. Projected units sales: July, 140,000; August 150,000; September 170,000; October 140,000.
2. Sales price per unit, $15.00
3. Units in ending inventory each month should equal 10% of next month sales. Beginning
inventory in units is 14,000 units.
4. Raw material required per unit is 2 pounds @ $3.00 per lb. The beginning raw material inventory is 12,600 lbs.
5. Ending inventory required at the end of each month is 5% of next month needs.
6. Direct labor required to produce one units is .25 direct labor hour. The hourly rate is $10.00. 7. Variable overhead costs for the quarter are projected to be $575,000 and fixed overhead costs are projected to be $225,000 monthly. 115,000 direct labor hours are expected to be worked in the quarter. (hint. you need to compute the variable overhead rate)
8. Sales and administrative expenses are projected to be: salaries $275, 000 per month, commissions 2% of sales dollars and other expenses are expected to be $75,000 per month plus 3% of sales dollars.
Instructions: using the parameters listed above, prepare the following budgets for the 3rd quarter:****
1. Sales
2. Production
3. Raw materials, include the cost.
4. Direct labor, include the cost.
5. Manufacturing overhead
6. Sales and administrative.
VERY IMPORTANT: budgets are to be presented on an excel worksheet using the following parameters.
1. The font size is to be 11.
2. Column A (description) is to be 38 wide.
3. Columns B through E are to be 13 wide
4. Orientation is portrait
5. Fit to one page
6. Sheet to show gridlines
7. Lines are to be default width.
Using the above parameters all budgets can be presented on one page using approximately 45 lines.
***NO INFORMATION WAS GIVEN FOR NOVEMBER!!!!!!! JULY, AUGUST, AND SEPTEMBER IS 3RD QUARTER OCTOBER INFORMATION IS GIVEN
Explanation / Answer
Note: In Case of Raw Material Budget as the Sales of November is not provided we have taken Production units of 140000 (Sales of October Units) units assuming opening and closing inventory are same in the absence of information to arrive at the
Sales Budget for 3rd Quarter July August September Total Sales Units 140000 150000 170000 460000 Sales Price Per Unit $15 $15 $15 $15 Total Sales $2,100,000 $2,250,000 $2,550,000 $6,900,000 Production Budget for 3rd Quarter Sales in Units 140000 150000 170000 460000 Ending Inventory Required(10% of Next Months Sale 15000 17000 14000 46000 Opening Inventory -14000 -15000 -17000 -46000 Production in Units 141000 152000 167000 460000 Raw Material Budget Production Units 141000 152000 167000 460000 Raw Material Required in Lbs 282000 304000 334000 920000 Beginning Raw Material Inventory -12600 -15200 -16700 -44500 Ending Raw Material Inventory 15200 16700 14000 45900 Raw Material Purchase 284600 305500 331300 921400 Raw material cost per Unit $3 $3 $3 $3 Raw Material Purchase Cost $853,800 $916,500 $993,900 $2,764,200 Direct Labour Prouction Units 141000 152000 167000 460000 Labour Hours Required per Unit 0.25 0.25 0.25 0.25 Total Labour Hours Required 35250 38000 41750 115000 Labour Cost Per Hour $10 $10 $10 $10 Total Direct Labour Cost $352,500 $380,000 $417,500 $1,150,000 Manufacturing Overhead Variable Ovehead Rate Per Unit= Total Variable cost/Production Units 575000/460000= 1.25 Prouction in Units 141000 152000 167000 460000 Variable Overhead per unit $1.25 $1.25 $1.25 $1.25 Total Variable Overhead $176,250.00 $190,000.00 $208,750.00 $575,000.00 Fixed Overhead $225,000 $225,000 $225,000 $675,000 Total Manufacturing Overhead $450,000 $450,000 $450,000 $1,350,000 Sales & Administrative Budget Salaries $275,000 $275,000 $275,000 $825,000 Commissions $42,000 $45,000 $51,000 $138,000 Other Expenses $138,000 $142,500 $151,500 $432,000 Total Sales and Administrative Expense $455,000 $462,500 $477,500 $1,395,000Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.