Comprehensive Master Budget
Accounting 2302
Jeffrey Vaughn, president of Frame-It Company, was just concluding a budget meeting with his senior staff. It was November of 20x0, and the group was discussing preparation of the firm’s master budget for 20x1. “I’ve decided to go ahead and purchase the industrial robot we’ve been talking about. We’ll make the acquisition on January 2 of next year, and I expect it will take most of the year to train the personnel and reorganize the production process to take full advantage of the new equipment.”
AND SO ON
Prepare Frame-It Company’s master budget for 20x1 by completing the following schedules and statements.
1. Sales budget:
2. Cash receipts budget:
3. Production budget:
4. Direct-material budget
5. Cash disbursements budget:
6. Summary cash budget:
7. Prepare a budgeted schedule of cost of goods manufactured and sold for the year 20x1. Note: Budgeted and actual MOH will be equal.
8. Prepare Frame-It’s budgeted income statement for 20x1. (Ignore income taxes.)
9. Prepare Frame-It’s budgeted statement of retained earnings for 20x1.
10. Prepare Frame-It’s budgeted balance sheet as of December 31, 20x1.
Click here for the solution: Jeffrey Vaughn, president of Frame-It Company, was just concluding a budget meeting with his senior staff
Showing posts with label budget. Show all posts
Showing posts with label budget. Show all posts
Monday, April 18, 2016
Wednesday, November 25, 2015
The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for August 2010 is summarized as follows:
a. Estimated sales of King and Prince chairs for August by sales territory:
Northern Domestic:
King.........................5,500 units at $750 per unit
Prince......................6,900 units at $520 per unit
Southern Domestic:
King.........................3,200 units at $690 per unit
Prince......................4,000 units at $580 per unit
International:
King........................1,450 units at $780 per unit
Prince......................900 units at $600 per unit
b. Estimated inventories at August 1:
Direct materials:
Finished Products
Fabric................4,500 sq. yds
King.....................950units
Wood.................6,000 lineal ft.
Prince..................280units
Filler...................2,800 cu, ft
Springs..............6,700 units
c. Desired inventories at August 31:
Direct Materials:
Finished Products:
Fabric..................4300 sq yds
King.............800units
Wood..................6,200 lineal ft.
Prince...........400units
Filler....................3,100 cu. ft
Springs................7,500 units
d. Direct materials used in production:
In manufacture of King:
Fabric..................5.0 sq. yds per unit of product
Wood ..................35 lineal ft. per unit of product
Filler.................... 3.8 cu ft. per units of product
Springs.................14 units per units of product
In manufacture of Prince:
Fabric...............$12.00 per sq. yd.
Filler..............$3.50 per cu. ft.
Wood................ 8.00 per lineal ft.
Springs........... 4.50 per unit
f. Direct labor requirements:
King:
Framing Department............ 2.5hrs. at $12 per hr.
Cutting Department.............. 1.5 hrs. at $11 per hr.
Upholstery Department.......... 2.4hrs. at $14 per hr.
Prince: Framing Department............ 1.8 hrs. at $12 per hr.
Cutting Department............. 0.5 hrs. at $11 per hr.
Upholstery Department......... 2.0hrs. at $14 per hr.
3.) Prepare a direct materials purchases budget for August.
Click here for the solution: The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
a. Estimated sales of King and Prince chairs for August by sales territory:
Northern Domestic:
King.........................5,500 units at $750 per unit
Prince......................6,900 units at $520 per unit
Southern Domestic:
King.........................3,200 units at $690 per unit
Prince......................4,000 units at $580 per unit
International:
King........................1,450 units at $780 per unit
Prince......................900 units at $600 per unit
b. Estimated inventories at August 1:
Direct materials:
Finished Products
Fabric................4,500 sq. yds
King.....................950units
Wood.................6,000 lineal ft.
Prince..................280units
Filler...................2,800 cu, ft
Springs..............6,700 units
c. Desired inventories at August 31:
Direct Materials:
Finished Products:
Fabric..................4300 sq yds
King.............800units
Wood..................6,200 lineal ft.
Prince...........400units
Filler....................3,100 cu. ft
Springs................7,500 units
d. Direct materials used in production:
In manufacture of King:
Fabric..................5.0 sq. yds per unit of product
Wood ..................35 lineal ft. per unit of product
Filler.................... 3.8 cu ft. per units of product
Springs.................14 units per units of product
In manufacture of Prince:
Fabric...............$12.00 per sq. yd.
Filler..............$3.50 per cu. ft.
Wood................ 8.00 per lineal ft.
Springs........... 4.50 per unit
f. Direct labor requirements:
King:
Framing Department............ 2.5hrs. at $12 per hr.
Cutting Department.............. 1.5 hrs. at $11 per hr.
Upholstery Department.......... 2.4hrs. at $14 per hr.
Prince: Framing Department............ 1.8 hrs. at $12 per hr.
Cutting Department............. 0.5 hrs. at $11 per hr.
Upholstery Department......... 2.0hrs. at $14 per hr.
3.) Prepare a direct materials purchases budget for August.
4.)Prepare a direct labor cost budget for August
Click here for the solution: The budget director of Regal Furniture Company requests estimates of sales, production, and other operating data from the various administrative units every month
Saturday, October 17, 2015
Multiple Choice: A budget aids in
1. A budget aids in _______. (Points : 1)
2. The preparation of an organization's budget _______. (Points : 1)
3. When actual performance varies from the budgeted performance, managers will be more likely to revise future budgets if the variances were _______. (Points : 1)
4. Strategic planning is _______. (Points : 1)
5. Tactical planning usually involves which level of management? (Points : 1)
6. Which of the following is not an "operating" budget? (Points : 1)
7. The master budget is a _______. (Points : 1)
8. Chronologically, the first part of the master budget to be prepared would be the _______. (Points : 1)
9. It is least likely that a production budget revision would cause a revision in the ______. (Points : 1)
10. Chronologically, in what order are the sales, purchases, and production budgets prepared? (Points : 1)
11. The amount of raw material purchased in a period may be different than the amount of material used that period because _______. (Points : 1)
12. Which of the following equations can be used to budget purchases?
(BI = beginning inventory, EI = ending inventory desired, CGS = budgeted cost of goods sold, P = budgeted purchases)
(Points : 1)
13. A company that maintains a raw material inventory, which is based on the following month's production needs, will purchase less material than it uses in a month where _______. (Points : 1)
14. The budgeted amount of selling and administrative expense for a period can be found in the ______. (Points : 1)
15. The budgeted payment for labor cost each period would be found in the _______. (Points : 1)
16. The primary reason that managers impose a minimum cash balance in the cash budget is _______. (Points : 1)
17. The pro forma income statement is not a component of the _______. (Points : 1)
18. A budget that includes a 12-month planning period at all times is called a ____ budget. (Points : 1)
19. Slack in operating budgets ______. (Points : 1)
20. Ball Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales. For the forthcoming month of March, Ball has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units. This suggests that ______. (Points : 1)
Click here for the solution: Multiple Choice: A budget aids in
2. The preparation of an organization's budget _______. (Points : 1)
3. When actual performance varies from the budgeted performance, managers will be more likely to revise future budgets if the variances were _______. (Points : 1)
4. Strategic planning is _______. (Points : 1)
5. Tactical planning usually involves which level of management? (Points : 1)
6. Which of the following is not an "operating" budget? (Points : 1)
7. The master budget is a _______. (Points : 1)
8. Chronologically, the first part of the master budget to be prepared would be the _______. (Points : 1)
9. It is least likely that a production budget revision would cause a revision in the ______. (Points : 1)
10. Chronologically, in what order are the sales, purchases, and production budgets prepared? (Points : 1)
11. The amount of raw material purchased in a period may be different than the amount of material used that period because _______. (Points : 1)
12. Which of the following equations can be used to budget purchases?
(BI = beginning inventory, EI = ending inventory desired, CGS = budgeted cost of goods sold, P = budgeted purchases)
(Points : 1)
13. A company that maintains a raw material inventory, which is based on the following month's production needs, will purchase less material than it uses in a month where _______. (Points : 1)
14. The budgeted amount of selling and administrative expense for a period can be found in the ______. (Points : 1)
15. The budgeted payment for labor cost each period would be found in the _______. (Points : 1)
16. The primary reason that managers impose a minimum cash balance in the cash budget is _______. (Points : 1)
17. The pro forma income statement is not a component of the _______. (Points : 1)
18. A budget that includes a 12-month planning period at all times is called a ____ budget. (Points : 1)
19. Slack in operating budgets ______. (Points : 1)
20. Ball Company has a policy of maintaining an inventory of finished goods equal to 30 percent of the following month's sales. For the forthcoming month of March, Ball has budgeted the beginning inventory at 30,000 units and the ending inventory at 33,000 units. This suggests that ______. (Points : 1)
Click here for the solution: Multiple Choice: A budget aids in
Friday, October 9, 2015
The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for July 2010 is summarized as follows:
a. Estimated sales for July by sales territory:
Maine:
Backyard Chef...........................5000 units at $750 per unit
Master Chef..............................1800 units at $1,500 per unit
Vermont:
Backyard Chef..........................4200 units at $800 per unit
Master Chef.............................1600 units at $1,600 per unit
New Hampshire:
Backyard Chef..........................4600 units at $850 per unit
Master Chef.............................1900 units at $1,700 per unit
b. Estimated inventories at July 1:
Direct materials: Finished products:
Grates.....................1000 units Backyard chef........1400 units
Stainless steel...........1800 lbs Master Chef........... 600 units
Burner subassemblies....500 units
Shelves.................... 300 units
c. Desired inventories at July 31:
Direct materials: Finished products:
Grates..................... 800 units Backyard chef........1600 units
Stainless steel........... 2100 lbs Master Chef........... 500 units
Burner subassemblies....550 units
Shelves.................... 350 units
d. Direct materials used in production:
In manufacture of Backyard Chef:
Grates.......................... 3 units per unit of product
Stainless steel................ 20 lbs per unit of product
Burner subassemblies....... 2 units per unit of product
Shelves......................... 5 units per unit of product
In manufacture of Master Chef:
Grates.......................... 6 units per unit of product
Stainless steel................ 45 lbs per unit of product
Burner subassemblies....... 4 units per unit of product
Shelves......................... 6 units per unit of product
e. Anticipated purchase price for direct materials:
Grates.............. $20 per unit Burner subassemblies...... $105 per unit
Stainless steel...... $6 per lb Shelves.........................$7 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Dept. 0.60 hr at $18 per hr
Forming Dept. 0.80 hr at $14 per hr
Assembly Dept. 1.50 hr at $12 per hr
Master Chef:
Stamping Dept. 0.80 hr at $18 per hr
Forming Dept. 1.50 hr at $14 per hr
Assembly Dept. 2.50 hr at $12 per hr
1. Prepare a sales budget for July.
2. Prepare a production budget for July.
3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
Click here for the solution: The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
a. Estimated sales for July by sales territory:
Maine:
Backyard Chef...........................5000 units at $750 per unit
Master Chef..............................1800 units at $1,500 per unit
Vermont:
Backyard Chef..........................4200 units at $800 per unit
Master Chef.............................1600 units at $1,600 per unit
New Hampshire:
Backyard Chef..........................4600 units at $850 per unit
Master Chef.............................1900 units at $1,700 per unit
b. Estimated inventories at July 1:
Direct materials: Finished products:
Grates.....................1000 units Backyard chef........1400 units
Stainless steel...........1800 lbs Master Chef........... 600 units
Burner subassemblies....500 units
Shelves.................... 300 units
c. Desired inventories at July 31:
Direct materials: Finished products:
Grates..................... 800 units Backyard chef........1600 units
Stainless steel........... 2100 lbs Master Chef........... 500 units
Burner subassemblies....550 units
Shelves.................... 350 units
d. Direct materials used in production:
In manufacture of Backyard Chef:
Grates.......................... 3 units per unit of product
Stainless steel................ 20 lbs per unit of product
Burner subassemblies....... 2 units per unit of product
Shelves......................... 5 units per unit of product
In manufacture of Master Chef:
Grates.......................... 6 units per unit of product
Stainless steel................ 45 lbs per unit of product
Burner subassemblies....... 4 units per unit of product
Shelves......................... 6 units per unit of product
e. Anticipated purchase price for direct materials:
Grates.............. $20 per unit Burner subassemblies...... $105 per unit
Stainless steel...... $6 per lb Shelves.........................$7 per unit
f. Direct labor requirements:
Backyard Chef:
Stamping Dept. 0.60 hr at $18 per hr
Forming Dept. 0.80 hr at $14 per hr
Assembly Dept. 1.50 hr at $12 per hr
Master Chef:
Stamping Dept. 0.80 hr at $18 per hr
Forming Dept. 1.50 hr at $14 per hr
Assembly Dept. 2.50 hr at $12 per hr
1. Prepare a sales budget for July.
2. Prepare a production budget for July.
3. Prepare a direct materials purchases budget for July.
4. Prepare a direct labor cost budget for July.
Click here for the solution: The budget director of Outdoor Gourmet Grill Company requests estimates of sales, production, and other operating data
Friday, September 25, 2015
Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours
ACC 560 Week 6 Assignment
E10-4 Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Indirect labor $1.00
Indirect materials 0.50
Utilities 0.40
Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800. Assume that in July 2008, Raney Company incurs the following manufacturing overhead costs.
Variable Costs Fixed Costs
Indirect labor $8,700 Supervision $4,000
Indirect materials 4,300 Depreciation 1,500
Utilities 3,200 Property taxes 800
Instructions
a) Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month.
b) Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month.
c) Comment on your finding
Click here for the solution: Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours
E10-4 Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours. Variable manufacturing overhead costs per direct labor hour are as follows.
Indirect labor $1.00
Indirect materials 0.50
Utilities 0.40
Fixed overhead costs per month are: Supervision $4,000, Depreciation $1,500, and Property Taxes $800. Assume that in July 2008, Raney Company incurs the following manufacturing overhead costs.
Variable Costs Fixed Costs
Indirect labor $8,700 Supervision $4,000
Indirect materials 4,300 Depreciation 1,500
Utilities 3,200 Property taxes 800
Instructions
a) Prepare a flexible budget performance report, assuming that the company worked 9,000 direct labor hours during the month.
b) Prepare a flexible budget performance report, assuming that the company worked 8,500 direct labor hours during the month.
c) Comment on your finding
Click here for the solution: Raney Company uses a flexible budget for manufacturing overhead based on direct labor hours
Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
ACC 560 Week 6 Assignment
E10-7 Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data.
Variable Costs Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,000
Indirect labor 10,000 Depreciation 7,000
Utilities 8,000 Property taxes and insurance 8,000
Maintenance 6,000 Maintenance 5,000
Actual variable costs were: indirect materials $13,800, indirect labor $9,600, utilities $8,700, and maintenance $4,900. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.
All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.
Instructions
(a) Prepare a flexible manufacturing overhead budget report for the first quarter.
(b) Prepare a responsibility report for the first quarter.
Click here for the solution: Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
E10-7 Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data.
Variable Costs Fixed Costs
Indirect materials $12,000 Supervisory salaries $36,000
Indirect labor 10,000 Depreciation 7,000
Utilities 8,000 Property taxes and insurance 8,000
Maintenance 6,000 Maintenance 5,000
Actual variable costs were: indirect materials $13,800, indirect labor $9,600, utilities $8,700, and maintenance $4,900. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,200. The actual activity level equaled the budgeted level.
All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance.
Instructions
(a) Prepare a flexible manufacturing overhead budget report for the first quarter.
(b) Prepare a responsibility report for the first quarter.
Click here for the solution: Pletcher Company's manufacturing overhead budget for the first quarter of 2008 contained the following data
Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
ACC 560 Week 6 Assignment
E9-9 Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2008, the following data are available.
1. Sales: 20,000 units quarter 1; 22,000 units quarter 2.
2. Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and advertising 3%.
3. Fixed costs per quarter: Sales salaries $10,000, office salaries $6,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $600.
4. Unit selling price: $20.
Instructions
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2008.
Click here for the solution: Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
E9-9 Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget. For the first 6 months of 2008, the following data are available.
1. Sales: 20,000 units quarter 1; 22,000 units quarter 2.
2. Variable costs per dollar of sales: Sales commissions 5%, delivery expense 2%, and advertising 3%.
3. Fixed costs per quarter: Sales salaries $10,000, office salaries $6,000, depreciation $4,200, insurance $1,500, utilities $800, and repairs expense $600.
4. Unit selling price: $20.
Instructions
Prepare a selling and administrative expense budget by quarters for the first 6 months of 2008.
Click here for the solution: Edington Company combines its operating expenses for budget purposes in a selling and administrative expense budget
Fuqua Company has accumulated the following budget data for the year 2008
ACC 560 Week 6 Assignment
E9-11 Fuqua Company has accumulated the following budget data for the year 2008.
1. Sales: 30,000 units, unit selling price $80.
2. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): Beginning, 10,000 pounds; ending, 15,000 pounds.
4. Raw materials cost: $5 per pound.
5. Selling and administrative expenses: $200,000.
6. Income taxes: 30% of income before income taxes.
Instructions
a) Prepare a schedule showing the computation of cost of goods sold for 2008.
b) Prepare a budgeted income statement for 2008.
Click here for the solution: Fuqua Company has accumulated the following budget data for the year 2008
E9-11 Fuqua Company has accumulated the following budget data for the year 2008.
1. Sales: 30,000 units, unit selling price $80.
2. Cost of one unit of finished goods: Direct materials 2 pounds at $5 per pound, direct labor 3 hours at $12 per hour, and manufacturing overhead $6 per direct labor hour.
3. Inventories (raw materials only): Beginning, 10,000 pounds; ending, 15,000 pounds.
4. Raw materials cost: $5 per pound.
5. Selling and administrative expenses: $200,000.
6. Income taxes: 30% of income before income taxes.
Instructions
a) Prepare a schedule showing the computation of cost of goods sold for 2008.
b) Prepare a budgeted income statement for 2008.
Click here for the solution: Fuqua Company has accumulated the following budget data for the year 2008
(ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
ACC 560 Week 6 Assignment
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
Tuesday, September 8, 2015
The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months
PR 22-4A The controller of Dash Shoes Inc. instructs you to prepare a
monthly cash budget for the next three months. You are presented with
the following budget information:
June July August
Sales 120,000 150,000 200,000
Manufacturing costs 50,000 65,000 72,000
Selling & admin exp 35,000 40,000 45,000
Capital expenditures ---- --- 48,000
AND SO ON
INSTRUCTIONS:
1. Prepare a monthly cash budget and supporting schedules for June, July, and August 2010.
2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Click here for the solution: The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months
June July August
Sales 120,000 150,000 200,000
Manufacturing costs 50,000 65,000 72,000
Selling & admin exp 35,000 40,000 45,000
Capital expenditures ---- --- 48,000
AND SO ON
INSTRUCTIONS:
1. Prepare a monthly cash budget and supporting schedules for June, July, and August 2010.
2. On the basis of the cash budget prepared in part (1), what recommendation should be made to the controller?
Click here for the solution: The controller of Dash Shoes Inc. instructs you to prepare a monthly cash budget for the next three months
The budget director of Heads Up Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager
PR 22-3A The budget director of Heads Up Athletic Co., with the
assistance of the controller, treasurer, production manager, and sales
manager, has gathered the following data for use in developing the
budgeted income statement for January 2010.
a. Estimated sales for January:
Batting helmet 3,700 units at $70 per unit
Football helmet 7,200 units at $142 per unit
AND SO ON
INSTRUCTIONS:
1. Prepare a sales budget for January.
2. Prepare a production budget for January.
3. Prepare a direct materials purchases budget for January.
4. Prepare a direct labor cost budget for January.
5. Prepare a factory overhead cost budget for January.
6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $12,500, and work in process at the end of January is desired to be $13,500.
7. Prepare a selling and administrative expenses budget for January.
8. Prepare a budgeted income statement for January.
Click here for the solution: The budget director of Heads Up Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager
a. Estimated sales for January:
Batting helmet 3,700 units at $70 per unit
Football helmet 7,200 units at $142 per unit
AND SO ON
INSTRUCTIONS:
1. Prepare a sales budget for January.
2. Prepare a production budget for January.
3. Prepare a direct materials purchases budget for January.
4. Prepare a direct labor cost budget for January.
5. Prepare a factory overhead cost budget for January.
6. Prepare a cost of goods sold budget for January. Work in process at the beginning of January is estimated to be $12,500, and work in process at the end of January is desired to be $13,500.
7. Prepare a selling and administrative expenses budget for January.
8. Prepare a budgeted income statement for January.
Click here for the solution: The budget director of Heads Up Athletic Co., with the assistance of the controller, treasurer, production manager, and sales manager
Sunday, September 6, 2015
Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011
Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011.
January -March 1,080,000
April-June 1,360,000
July-September 980,000
October-December 1,100,000
Total 4,520,000
Sales for the first quarter of 2012 are expected to be 1,200,000 units. Ending Inventory of finished goods for each quarter is scheduled to equal 10 percent of next quarter's budgeted sales. The company's ending inventory on December 31, 2010, is estimated at 94,500 units. Develop a quarterly production budget for 2011 and for the year in total.
Assignment Checklist:
1) Prepare the beginning inventory for the first quarter
2) Prepare the budgeted beginning inventory for the second - fourth quarters
3) Prepare the budgeted production for each quarter
4) Prepare the budgeted production for the year
Click here for the solution: Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011
January -March 1,080,000
April-June 1,360,000
July-September 980,000
October-December 1,100,000
Total 4,520,000
Sales for the first quarter of 2012 are expected to be 1,200,000 units. Ending Inventory of finished goods for each quarter is scheduled to equal 10 percent of next quarter's budgeted sales. The company's ending inventory on December 31, 2010, is estimated at 94,500 units. Develop a quarterly production budget for 2011 and for the year in total.
Assignment Checklist:
1) Prepare the beginning inventory for the first quarter
2) Prepare the budgeted beginning inventory for the second - fourth quarters
3) Prepare the budgeted production for each quarter
4) Prepare the budgeted production for the year
Click here for the solution: Nafari Company's sales budget has the following unit sales projection for each quarter of the calendar year 2011
Differentiate between the operating and financial budgets that are contained in a master budget
8-5 Differentiate between the operating and financial budgets that are contained in a master budget. Why are both types needed?
Click here for the solution: Differentiate between the operating and financial budgets that are contained in a master budget
Click here for the solution: Differentiate between the operating and financial budgets that are contained in a master budget
Sunday, August 23, 2015
Longchamps Electric is faced with a capital budget of $150,000 for the coming year
Longchamps Electric is faced with a capital budget of $150,000 for the coming year. It is considering six investment projects and has a cost of capital of 7%. The six projects are listed in the following table, along with their initial investments and their IRRs. Using the data given, prepare an investment opportunities schedule (IOS). Which projects does the IOS suggest be funded? Does this group of projects maximize NPV? Explain.
Project Initial Investment IRR
1 $75,000 8%
2 40,000 10%
3 35,000 7%
4 50,000 11%
5 45,000 9%
6 20,000 6%
Click here for the solution: Longchamps Electric is faced with a capital budget of $150,000 for the coming year
Project Initial Investment IRR
1 $75,000 8%
2 40,000 10%
3 35,000 7%
4 50,000 11%
5 45,000 9%
6 20,000 6%
Click here for the solution: Longchamps Electric is faced with a capital budget of $150,000 for the coming year
Thursday, August 13, 2015
At the beginning of the 2010 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December
At the beginning of the 2010 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December. The budget must plan for enough cash on December 31 to pay the soring semester tuition, which is the same as the fall tuition. The following information relates to the budget:
Cash balance, September 1(from a summer job) $7,000
Purchase season football tickets in September 100
Additional entertainment for each month 250
Pay fall semester tuition on September 3 3,800
Pay rent at the beginning of each month 350
Pay for food each month 200
Pay apartment deposit on September 2(to be returned Dec 15) 500
Part-time job earnings each month (net of taxes) 900
a. Prepare a cash budget for September, October, November, and December.
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. What are the budget implications for Britney Logan?
Click here for the solution: At the beginning of the 2010 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December
Cash balance, September 1(from a summer job) $7,000
Purchase season football tickets in September 100
Additional entertainment for each month 250
Pay fall semester tuition on September 3 3,800
Pay rent at the beginning of each month 350
Pay for food each month 200
Pay apartment deposit on September 2(to be returned Dec 15) 500
Part-time job earnings each month (net of taxes) 900
a. Prepare a cash budget for September, October, November, and December.
b. Are the four monthly budgets that are presented prepared as static budgets or flexible budgets?
c. What are the budget implications for Britney Logan?
Click here for the solution: At the beginning of the 2010 school year, Britney Logan decided to prepare a cash budget for the months of September, October, November, and December
Valley Corporation is attempting to select the best of a group of independent projects competing for the firm’s fixed capital budget of $4.5 million
Valley Corporation is attempting to select the best of a group of independent projects competing for the firm’s fixed capital budget of $4.5 million. The firm recognizes that any unused portion of this budget will learn than its 15% cost of capital, thereby resulting in a present value of inflows that is less than the initial investment. The firm has summarized, in the following table, the key data to be used in selecting the best group projects.
Project Initial Investment IRR Present Value of inflows at 15%
A $5,000,000 17% $5,400,000
B 800,000 18 1,100,000
C 2,000,000 19 2,300,000
D 1,500,000 16 1,600,000
E 800,000 22 900,000
F 2,500,000 23 3,000,000
G 1,200,000 20 1,300,000
a. Use the internal rate of return (IRR) approach to select the best group of projects.
b. Use the net present value (NPV) approach to select the best group of projects.
c. Compare, contrast, and discuss your findings in parts a and b.
d. Which projects should the firm implement? Why?
Click here for the solution: Valley Corporation is attempting to select the best of a group of independent projects competing for the firm’s fixed capital budget of $4.5 million
Project Initial Investment IRR Present Value of inflows at 15%
A $5,000,000 17% $5,400,000
B 800,000 18 1,100,000
C 2,000,000 19 2,300,000
D 1,500,000 16 1,600,000
E 800,000 22 900,000
F 2,500,000 23 3,000,000
G 1,200,000 20 1,300,000
a. Use the internal rate of return (IRR) approach to select the best group of projects.
b. Use the net present value (NPV) approach to select the best group of projects.
c. Compare, contrast, and discuss your findings in parts a and b.
d. Which projects should the firm implement? Why?
Click here for the solution: Valley Corporation is attempting to select the best of a group of independent projects competing for the firm’s fixed capital budget of $4.5 million
Thursday, July 30, 2015
Sales budget data for Palermo Company are given in BE9-2
BE9-3: Sales budget data for Palermo Company are given in BE9-2. Management desires to have an ending finished goods inventory equal to 25% of the next quarter’s expected unit sales. Prepare a production budget by quarters for the first 6 months of 2014.
Click here for the solution: Sales budget data for Palermo Company are given in BE9-2
Click here for the solution: Sales budget data for Palermo Company are given in BE9-2
Tuesday, July 14, 2015
a. What is the difference between budget lapsing and line-item budgets?
P 6–4 Budget Lapsing versus Line-Item Budgets
a. What is the difference between budget lapsing and line-item budgets?
b. What types of organizations would you expect to use budget lapsing?
c. What types of organizations would you expect to use line-item budgets?
Click here for the solution: a. What is the difference between budget lapsing and line-item budgets?
a. What is the difference between budget lapsing and line-item budgets?
b. What types of organizations would you expect to use budget lapsing?
c. What types of organizations would you expect to use line-item budgets?
Click here for the solution: a. What is the difference between budget lapsing and line-item budgets?
Tuesday, July 7, 2015
The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager
The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager, has gathered the following data for use in developing the budgeted income statement for October 2012
a. Estimated sales for December:
Bird House . . . . . . . . . . . . . . . . . . . . 3,500 units at $45 per unit
Bird Feeder. . . . . . . . . . . . . . . . . . . . 3,700 units at $65 per unit
AND SO ON
Instructions
1. Prepare a sales budget for October.
2. Prepare a production budget for October.
3. Prepare a direct materials purchases budget for October.
4. Prepare a direct labor cost budget for October.
5. Prepare a factory overhead cost budget for October.
6. Prepare a cost of goods sold budget for October. Work in process at the beginning of October is estimated to be $27,000, and work in process at the end of October is estimated to be $32,400.
7. Prepare a selling and administrative expenses budget for October.
8. Prepare a budgeted income statement for October.
Check: 4. Total Direct Labor Cost in Fabrication Dept., $32,760
Click here for the solution: The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager
a. Estimated sales for December:
Bird House . . . . . . . . . . . . . . . . . . . . 3,500 units at $45 per unit
Bird Feeder. . . . . . . . . . . . . . . . . . . . 3,700 units at $65 per unit
AND SO ON
Instructions
1. Prepare a sales budget for October.
2. Prepare a production budget for October.
3. Prepare a direct materials purchases budget for October.
4. Prepare a direct labor cost budget for October.
5. Prepare a factory overhead cost budget for October.
6. Prepare a cost of goods sold budget for October. Work in process at the beginning of October is estimated to be $27,000, and work in process at the end of October is estimated to be $32,400.
7. Prepare a selling and administrative expenses budget for October.
8. Prepare a budgeted income statement for October.
Check: 4. Total Direct Labor Cost in Fabrication Dept., $32,760
Click here for the solution: The budget director of Feathered Friends Inc., with the assistance of the controller, treasurer, production manager, and sales manager
Monday, July 6, 2015
The budget director of Outdoor Chef Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month
The budget director of Outdoor Chef Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month. Selected information concerning sales and production for May 2012 is summarized as follows:
a. Estimated sales for May by sales territory:
b. Estimated inventories at May 1:
c. Desired inventories at May 31:
d. Direct materials used in production:
e. Anticipated purchase price for direct materials:
f. Direct labor requirements:
Required;
1. Prepare a sales budget for May.
2. Prepare a production budget for May.
3. Prepare a direct materials purchases budget for May.
4. Prepare a direct labor cost budget for May
Check: 3. Total Direct Materials Purchases, $939,065
Click here for the solution: The budget director of Outdoor Chef Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month
a. Estimated sales for May by sales territory:
b. Estimated inventories at May 1:
c. Desired inventories at May 31:
d. Direct materials used in production:
e. Anticipated purchase price for direct materials:
f. Direct labor requirements:
Required;
1. Prepare a sales budget for May.
2. Prepare a production budget for May.
3. Prepare a direct materials purchases budget for May.
4. Prepare a direct labor cost budget for May
Check: 3. Total Direct Materials Purchases, $939,065
Click here for the solution: The budget director of Outdoor Chef Grill Company requests estimates of sales, production, and other operating data from the various administrative units every month
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