1 (22 points). Jango Fett Inc., produces wiring harness assemblies used in the p
ID: 2535583 • Letter: 1
Question
1 (22 points). Jango Fett Inc., produces wiring harness assemblies used in the production human robotics. The wiring harness assemblies are sold to various robotic manufacturers around the world Projected sales in units for the coming five months are given below January 10,000 February 10,500 March 13,000 Apri 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications used by Jango Fett 1. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. 2. The data on materials used are as follows: Direct Material Part #R2-D2 Part #C-3P0 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on hand on January 1. 3. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20 4. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours Per-Unit Usage Unit Cost $4 7 Fixed Cost Component Variable Cost Component $1.00 0.20 1.10 Supplies Power Maintenance Supervision Depreciation Taxes Other 12,500 14,000 45,000 4,300 86,000 1.60Explanation / Answer
Solution:
Part 1 –
Sales Budget
For the First Quarter
January
February
March
Total Quarter First
Expected Sales Unit
10000
10500
13000
33500
Unit Selling Price
$110
$110
$110
$110
Budgeted Sales in dollars
$1,100,000
$1,155,000
$1,430,000
$3,685,000
Part 2 –
Production Budget
Working
January
February
March
Total Quarter First
April
May
Budgeted bats to be sold
10000
10500
13000
33500
16,000
18,500
Plus: Desired Ending Inventory
(20% of next month's Unit sales)
2100
2600
3200
(April 16000*20%)
3200
3700
Total Needs
12100
13100
16200
36700
19700
Less: Estimated Beginning Inventory
(Ending Inventory of last month)
900
2100
2600
900
3200
Budgeted Units to be produced
11200
11000
13600
35800
16500
Part 3 –
Direct Materials Budget
Part # R2-D2
Part # C-3P0
January
February
March
Total Quarter First
January
February
March
Total Quarter First
GROSS TOTAL
Budgeted Units to be produced
11,200
11,000
13,600
11200
11000
13600
Direct materials per unit in pounds
2
2
2
3
3
3
Direct materials needed for production
22400
22000
27200
33600
33000
40800
Plus: Desired Raw Material Ending Inventory (30% of next month's production needs)
6600
8160
9900
9900
12240
14850
Total direct materials needed
29000
30160
37100
43500
45240
55650
Less: Estimated Beginning Inventory
6720
6600
8160
10080
9900
12240
Budgeted Raw Materials purchases in units
22280
23560
28940
33420
35340
43410
Direct materials cost per unit
$4
$4
$4
$7
$7
$7
Budgeted cost of direct materials
$89,120
$94,240
$115,760
$299,120
$233,940
$247,380
$303,870
$785,190
$1,084,310
Part 4 –
Direct Labor Budget
January
February
March
Total Quarter First
Budgeted Bats to be produced
11200
11000
13600
35800
Direct Labor hour needed per unit
1.5
1.5
1.5
1.5
Direct labor hours needed for production
16800
16500
20400
53700
Hourly Rate
$20
$20
$20
$20
Budgeted Direct Labor Costs
$336,000
$330,000
$408,000
$1,074,000
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Pls ask separate question for remaining parts
Sales Budget
For the First Quarter
January
February
March
Total Quarter First
Expected Sales Unit
10000
10500
13000
33500
Unit Selling Price
$110
$110
$110
$110
Budgeted Sales in dollars
$1,100,000
$1,155,000
$1,430,000
$3,685,000
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