em 13-49. Estimate the cash from operations expected in year2. (LO 13-5) Rer to

ID: 2573162 • Letter: E

Question

em 13-49. Estimate the cash from operations expected in year2. (LO 13-5) Rer to the data in 51, Prepare aProduction Bud coming year and askes cloth ''get acts ir and asks for your assistance The following costs and other data apply to bag shoping bags The conrler s peparing a budget fo txcel (LO 13-4) elcel on: Direct materials per bag .0 yard cotton at $4 per yard 0.2 yards canvas finish at $12 per yard 0.5 hour at $18 per hour Indirect labor Direct labor per bag Overhead per bag $0.60 0.20 Indirect materials . . . Building occupancy.. Total overhead per unit 1.30 0.90 $3.40 You learn that equipment costs and building occupancy are fixed and are based on a normal roduction of 600.000 units per year. Other overhead costs are variable. Plant capacity is suf. ficient to produce 750,000 units per year Labor costs per hour are not expected to change during the year. However, the cotton supplier has informed EcoSacks that it will impose a 20 percent price increase at the start of the coming budget period. No other costs are expected to change. During the coming budget period, EcoSacks expects to sell 540,000 bags Finished goods ory is targeted to increase from the current balance of 120,000 units to 210,000 units to for an expected sales increase the year after next as a result of legislation in several aes regarding plastic bags. Production will occur evenly throughout the year. Inventory or cotton and canvas are expected to remain unchanged throughout the year. There is nvent prepare bo work-in-process inventory Required re a production budget and estimate the materials, labor, and overhead costs for the (LO 13-4) bus toan Inc., manufactures steel fittings Each fitting requires both steel and an alloy that tion of the ing to be used under extreme conditions The following data apply to the produc 3-52. Prepare a Production Budget 3 pounds of steel at $O.50 per pound 0.5 pounds of alloy at $2.00 per pound Direct materials per unit Direct labor per unit 0.02 hours at $25 per hour Continued)

Explanation / Answer

Production Budget

Estimated sales - in units

540000

Add: Ending Inventory

210000

Total units required

750000

Less: Beginning Inventory

120000

Production in units

630000

Estimate of Manufacturing costs

Per unit Qty

Per unit rate

Total Amount

Material

Cotton

1.00

$25,20,000

Canvas

0.20

$12

$15,12,000

Total Material costs

$40,32,000

Direct Labor

0.50

$18

$56,70,000

Overheads

$3.40

$21,42,000

Total Costs

$158,76,000