ACC 512 Chapter 10 Case manufacturing costs per table are as Hot Coffee Manufact

Question

ACC 512 Chapter 10 Case manufacturing costs per table are as Hot Coffee Manufacturing produces and sells oak tables. The budgeted follows Direct costs Oak top Table legs 48 square feet at $10 per sq. ft 4 legs at $5 per leg Direct labor is 3 hours and 24 minutes per table at $15 per hour The variable overhead rate is $6 per drect labor hour and the fixed overhead rate is $8 per drect labor hour. Inventories are expected to be as follows: Direct Materials Beginni Target E Oak t Table legs 500 240 550 200 30 tables Finished Goods 20 tables Budgeted Sales for May, Year 18 are expected to be 2,000 tables. Selling prices are budgeted to be $600 per table A. For May Ye? 18, prepare a a. b. C. d. e. Sales Budget. Production Budget in units Direct materials budget in units and in dollars Manufacturing Labor Budget Overhead Budget B. Refer to A above, the company expects to have beginning cash of $150,000 on May 1, Year 18 In addition to the above expenditures, the company is expected to have the following expenses the income statement: a. Selling Expenses b. Administrative Expenses c. Depreciation Prepare a cash budget for May Year 18 24,000 16,000 20,000

Explanation / Answer

A.

B.

a. Sales Budget Sales units 2000 Unit selling price 600 Budgeted Sales 1200000 b. Production Budget Budgeted unit sales 2000 Add: Ending Inventory 30 Total units needed 2030 Less: Beginning Inventory 20 Budgeted Production 2010 c. Direct material budget Oak Tops Table legs Required per unit of production (Sq.ft. / nos) 48 10 Budgeted production 2010 2010 Total units required for production 96480 20100 Add: Desired Ending Inventory 550 200 Total units needed 97030 20300 Less: Ending Inventory 500 240 Budgeted purchases (units) 96530 20060 Cost per unit    ($) 10 5 Budgeted piurchases ($) 965300 100300 d. Direct labor budget Budgeted Production 2010 Direct labour hours per unit - 3 hrs 24 min. 3.40 Direct labor hours for production 6834 Direct labor cost per hour $15.00 Direct labor cost 102510 e. Overhead Budet Direct labor hours 6834 Variable overhead cost per hour $6 Variable overhead cost 41004 Fixed overhead cost per hour $8 Fixed overhead cost 54672 Total Overhead 95676

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