Q: Computer Accessories assembles a computer networking device from kits of impo
ID: 2566110 • Letter: Q
Question
Q:
Computer Accessories assembles a computer networking device from kits of imported components.
You have been asked to develop a quarterly and annual operating budget and a pro-forma income statements for the year ending December 31, 2017.
You have obtained the following information:
Beginning-of-year balances
Cash
$50,000
Accounts receivables (previous quarter's sales)
$61,200
Raw materials
653 Kits
Finished Goods
510 units
Accounts payable
$33,255
Desired end-of-year inventory balances
Raw materials
500
kits
Finished goods
270
units
Desired end-of-quarter balances
Raw materials as a portions of the following quarter's production
20%
Finished goods as a portion of the followingquarter's sales
15%
Manufacturing costs other than raw materials are paid in month incurred unless it is an noncash expense
Variable Standard cost per unit
Unit of input
Unit price per input
Total cost per unit
Raw materials
1
Kit 50
50
$50
Direct labor hours at rate
0.8
Hour 25
20
$20
Variable overhead/labor hour
0.8
Hour 10
8
$8
Total Variable Standard cost per unit
78
$78
Fixed overhead cost per quarter used cash
$50,000
Manufacturing Depreciation per quarter
$10,000
Selling and administrative costs are paid in month incurred unless it is an noncash expense
Variable cost per unit
$6
Fixed selling and administrative cost per quarter used cash
$25,000
Selling and administrative depreciation per quarter
$5,000
Additional information: All cash payments except purchases are made quarterly as incurred.
Portion of sales collected
Collected in the quarter of sale
75%
Subsequent quarter
24%
Bad debts
1%
Portion of purchases paid
Paid in the quarter of purchases
70%
Subsequent quarter
30%
Unit selling price
$150
Sales forecast
Quarter
First
Second
Third
Fourth
Unit sales
3,400
2,500
3,000
4,100
Required: Prepare and answer the following. Make sure you use cell referencing
1. A sales budget for each quarter and the year.
2. A production budget for finished goods of units each quarter and the year.
3. A purchases budget for raw material of kits each quarter and the year.
4. A manufacturing cost budget for each quarter and the year.
5. A selling and administrative expense budget for each quarter and the year.
6. A cash budget for each quarter and the year.
7. A pro-forma contribution income statement for each quarter and the year.
Hint: You will need to compute Variable Cost of Goods Sold for each quarter, which is unit sold times total Variable Standard cost per unit.
8. Using your information from #7, compute the Breakeven in dollars for the year.
Hint: Compute the annual contribution margin ratio.
9. What if the company is able to lower the fixed Manufacturing overhead costs that uses per quarter from
$50,000 to $45,000. Which budgets will change and what will be the new annual income? You should only
Have to change the fixed manufacturing costs that uses cash on this worksheet and all the appropriate
Budgets will change on the solution worksheet if you have set up your cell references correctly. Make sure
You return the Fixed manufacturing overhead costs that uses cash back to the original number before you
Submit your solution.
Question 6,7,8 and 9 were not solved when I first asked the questions. I need answers from question 6 please. Thank you!
Here is the soultion for earlier 5 questions.
Computer Accessories assembles a computer networking device from kits of imported components.
You have been asked to develop a quarterly and annual operating budget and a pro-forma income statements for the year ending December 31, 2017.
You have obtained the following information:
Beginning-of-year balances
Cash
$50,000
Accounts receivables (previous quarter's sales)
$61,200
Raw materials
653 Kits
Finished Goods
510 units
Accounts payable
$33,255
Desired end-of-year inventory balances
Raw materials
500
kits
Finished goods
270
units
Desired end-of-quarter balances
Raw materials as a portions of the following quarter's production
20%
Finished goods as a portion of the followingquarter's sales
15%
Manufacturing costs other than raw materials are paid in month incurred unless it is an noncash expense
Variable Standard cost per unit
Unit of input
Unit price per input
Total cost per unit
Raw materials
1
Kit 50
50
$50
Direct labor hours at rate
0.8
Hour 25
20
$20
Variable overhead/labor hour
0.8
Hour 10
8
$8
Total Variable Standard cost per unit
78
$78
Fixed overhead cost per quarter used cash
$50,000
Manufacturing Depreciation per quarter
$10,000
Selling and administrative costs are paid in month incurred unless it is an noncash expense
Variable cost per unit
$6
Fixed selling and administrative cost per quarter used cash
$25,000
Selling and administrative depreciation per quarter
$5,000
Additional information: All cash payments except purchases are made quarterly as incurred.
Portion of sales collected
Collected in the quarter of sale
75%
Subsequent quarter
24%
Bad debts
1%
Portion of purchases paid
Paid in the quarter of purchases
70%
Subsequent quarter
30%
Unit selling price
$150
Sales forecast
Quarter
First
Second
Third
Fourth
Unit sales
3,400
2,500
3,000
4,100
Required: Prepare and answer the following. Make sure you use cell referencing
1. A sales budget for each quarter and the year.
2. A production budget for finished goods of units each quarter and the year.
3. A purchases budget for raw material of kits each quarter and the year.
4. A manufacturing cost budget for each quarter and the year.
5. A selling and administrative expense budget for each quarter and the year.
6. A cash budget for each quarter and the year.
7. A pro-forma contribution income statement for each quarter and the year.
Hint: You will need to compute Variable Cost of Goods Sold for each quarter, which is unit sold times total Variable Standard cost per unit.
8. Using your information from #7, compute the Breakeven in dollars for the year.
Hint: Compute the annual contribution margin ratio.
9. What if the company is able to lower the fixed Manufacturing overhead costs that uses per quarter from
$50,000 to $45,000. Which budgets will change and what will be the new annual income? You should only
Have to change the fixed manufacturing costs that uses cash on this worksheet and all the appropriate
Budgets will change on the solution worksheet if you have set up your cell references correctly. Make sure
You return the Fixed manufacturing overhead costs that uses cash back to the original number before you
Submit your solution.
Question 6,7,8 and 9 were not solved when I first asked the questions. I need answers from question 6 please. Thank you!
Here is the soultion for earlier 5 questions.
Computer Accessories Sales Budget For the year ending December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Units 3,400 2,500 3,000 4,100 13,000 Sales price $150 $150 $150 $150 $600 Sales Budget $510,000 $375,000 $450,000 $615,000 $1,950,000 Computer Accessories Production Budget For the year ending December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Unit sales 3,400 2,500 3,000 4,100 13,000 Desired Ending Inventory $375 $450 $615 $270 $1,710 Total Requirements 3,775 2,950 3,615 4,370 14,710 Less Beginning Inventory 510 $375 $450 $615 1950 Budgeted Production in units 3,265 2,575 3,165 3,755 12,760 Computer Accessories Purchases Budget For the year ending December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Budgeted production in units 3,265 2,575 3,165 3,755 12,760 Desired ending inventory of kits 515 633 751 500 500 Total Requirements 3,780 3,208 3,916 4,255 13,260 Less Beginning Inventory Kits 653 515 633 751 653 Purchase requirements in kits 3,127 2,693 3,283 3,504 12,607 Cost per kit $50 $50 $50 $50 $50 Total purchases of kits in dollars $ 156,350 $ 134,650 $ 164,150 $ 175,200 $ 630,350 Computer Accessories Manufacturing Cost Budget For the year ending December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Direct Materials: Budgeted production in units 3,265 2,575 3,165 3,755 Cost per kit $50 $50 $50 $50 Direct material cost $ 163,250 $ 128,750 $ 158,250 $ 187,750 $ 638,000 Direct labor: Budgeted production in units 3,265 2,575 3,165 3,755 Direct labor cost per unit $20 $20 $20 $20 Direct labor cost $ 65,300 $ 51,500 $ 63,300 $ 75,100 $ 255,200 Variable Manufacturing Overhead: Budgeted production in units 3,265 2,575 3,165 3,755 Variable Overhead cost per unit $8 $8 $8 $8 Variable Manufacturing Overhead $ 26,120 $ 20,600 $ 25,320 $ 30,040 $ 102,080 Fixed Manufacturing Overhead: $60,000 $60,000 $60,000 $60,000 Total Manufacturing Costs $ 314,670 $ 260,850 $ 306,870 $ 352,890 $ 1,235,280 Computer Accessories Selling and Administrative Expenses Budget For the year ending December 31, 2017 First Quarter Second Quarter Third Quarter Fourth Quarter Annual Total Budgets Sales Units from Budget #1 3,400 2,500 3,000 4,100 Budgets Sales Dollars from Budget #1 $510,000 $375,000 $450,000 $615,000 Variable selling and admin. expenses: Bad Debts 5,100 3,750 4,500 6,150 Variable selling and admin. expenses $20,400 $15,000 $18,000 $24,600 Total variable selling and admin. Expenses 25,500 18,750 22,500 30,750 Fixed Selling and administrative Expenses $30,000 $30,000 $30,000 $30,000 Total selling and administrative expenses $55,500 $48,750 $52,500 $60,750 $217,500Explanation / Answer
6.
7.
COMPUTER ACCESSORIES Cash budget for the year ending December 31, 2017 Quarter 1 Quarter 2 Quarter 3 Quarter 4 Total Opening Balance 50000 674180 1149570 1690150 50000 Collections from customers 953700 778650 877500 1184250 3794100 Cash available for disbursement 1003700 1452830 2027070 2874400 3844100 Cash Disbursements For Direct Material 142700 141160 155300 171885 611045 For direct labor 65300 51500 63300 75100 255200 For variable manufacturing overhead 26120 20600 25320 30040 102080 For fixed manufacturing overheads 50000 50000 50000 50000 200000 For variable selling and administrative expenses 20400 15000 18000 24600 78000 For fixed selling and administrative expenses 25000 25000 25000 25000 100000 Total Cash disbursements 329520 303260 336920 376625 1346325 Cash surplus 674180 1149570 1690150 2497775 2497775 Ending cash balance 674180 1149570 1690150 2497775 2497775Related Questions
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