6. ABC, Inc. manufactures cooking sets. The budgeted production is for 50,000 se

Question

6. ABC, Inc. manufactures cooking sets. The budgeted production is for 50,000 sets in 2012. Each set requires 1lb of plastic. The estimated January 1, 2012, beginning inventory is 30,000 lb. The desired ending balance is 29,000 lb of material. If the material costs $1.00 per lb, determine the materials budget for 2012 7. ABC, Inc. manufactures cooking sets. The budgeted production is for 50,000 sets in 2012. Each set requires 1 hours to manufacture. If manufacturing labor costs $10.00 per hour, determine the direct labor budget for 2012.

Explanation / Answer

6) Production = 50000 sets Material required for the production = 50,000 * 1 lb = 50,000 lbs Matetrial to be purchased = Material required + Desired ending material inventory - Beginning Inventory = 50000 + 29000 - 30000 = 49000 lbs Material cost budget for 2012 = 49,000 * $ 1 = $ 49,000 7) Direct labor budget for 2012 Production units 50,000 units Hours per unit 1 hour Total hours needed 50,000 hours Labour cost per hour $                10 Direct labour cost $     500,000 8) Particulars March April Budgeted Sales on account $     200,000 $ 220,000 Budgeted Cash Collection in April April 25% of april ($220,000*25%) $     55,000 75% of march ($200,000*75%) $ 150,000 Total Budgeted cash receipts $ 205,000

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