LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model, The company began operations on January 1, 20Y1, and is planning for 20Y2, its secornd year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be, In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing e prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets. Sales Budget The sales budget often uses the prior vear's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearmCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. LearnCo Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Unit Selling Total Product Volume Price Sales Basic Abacus 36,000 ४ $8 $288,000 Deluxe Abacus 36,000 12 V 432,000 Totals 72,000 $720,000 Production Budget The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels. You note that LearnCo has omitted six numbers from the following production budget and fil in the missing amounts. You may need to use numbers from the soles budget you prepared. LearnCo Production Budget For the Year Ending December 31, 20Y2 Units Basic Units Deluxe Expected units to be sold (from Sales Budget) 36,000 | ४ 36,000 V Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available 37,000V 39,000 Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units to be produced 35,950 V 36,900 Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year, Before you make any changes to the budget, you review the information on the foliowing Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Tabie), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 2. Deluxe abacus 3 Cost per package: Wood pieces $0.20 Beads $0.20 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 20Y2 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus Deluxe abacus Desired inventory, December 31, 20Y2 2,200 5,000 Total packages available Estimated inventory, January 1, 20Y2 (3,500) (4,500) Total packages to be purchased Unit price (per package) $58,310 Total direct materials to be purchased Direct Labor Cost Budget Direct labor needs from the direct labor cost budget shouid be coordinated between the production and personnel departments so that there will be enough labor available for production. Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Labor Data Table, or from the sales budget, production budget, and direct materiais purchases budget you prepared. When required, round your answers to the nearest dollar. Direct Labor Data Table Gluing Assembly Hours required per unit: Basic abacus 0.10 0.10 O Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $11 Assembly $19 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Labor Cost Budget For the Year Ending December 31, 20Y2 Gluing Assembly Total Hours required for production: Basic abacus Deluxe abacus Total Hourly rate Total direct labor cost $288,660 Factory Overhead Cost Budget The factory overhead cost budget should be integrated with the production budget to ensure that production is not interrupted during the year. This budget may be supported by departmental schedules, which normally separate factory overhead costs into fixed and variable costs so that department managers may monitor and evaluate costs during the year. For simplicity, LearnCo has not separated costs in this manner. After reviewing the following factory overhead cost budget, you note that LearnCo has completed the budget with the exception of one amount. Fill in the missing amount. LearnCo Factory Overhead Cost Budget For the Year Ending December 31, 20Y2 Indirect factory wages $5,400 Power and light Depreciation of plant and equipment 1,450 Total factory overhead cost $18,100 Cost of Goods Sold Budget The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget. Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared. LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2 Finished goods inventory, January 1, 20Y2 $9,870 Work in process inventory, January 1, 20Y2 $2,010 Direct materials: Direct materials inventory, January 1, 20Y2 $1,600 Direct materials purchases Cost of direct materials available for use Direct materials inventory, December 31, 20Y2 (1,440) Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Work in process inventory, December 31, 20Y2 (1,250) Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, December 31, 20Y2: (1,500) Cost of goods sold Selling/Admin. Expenses Budget The sales budget is often used as the starting point for the selling and administrative expenses budget. For example, a budgeted increase in sales may require more advertising expenses. LearnCo has prepared its selling and administrative expenses budget as follows. This budget is merely reviewed by you for use on the budgeted income statement. LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2 Selling expenses: Sales salaries expense $45,000 Advertising expense 15,000 Travel expense 5,400 Total selling expenses $65,400 Administrative expenses: Officers' salaries expense $85,000 Office salaries expense 35,000 Office rent expense 26,000 Office supplies expense 6,400 Miscellaneous administrative expenses 1,600 Total administrative expenses 154,000 Total selling and administrative expenses $219,400 Budgeted Income Statement The budgeted income statement is prepared by integrating the sales budget, cost of goods sold budget, and selling and administrative expenses budget. Additional information that may be helpful in preparing the budgeted income statement are on the following Budgeted Income Statement Data Table. Review the Budgeted Income Statement Data Table, then complete the budgeted income statement that follows the table. Round the computed amount for income tax to the nearest whole dollar. Budgeted Income Statement Data Table Interest revenue for the year $2,000 Interest expense for the year $1,500 LearnCo's income tax rate 40% LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Operating income Other revenue and expense: Interest revenue Interest expense Income before income tax Income tax Net income LearnCo LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model, The company began operations on January 1, 20Y1, and is planning for 20Y2, its secornd year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be, In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing e prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 20Y2 budgets. Sales Budget The sales budget often uses the prior vear's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearmCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. LearnCo Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Unit Selling Total Product Volume Price Sales Basic Abacus 36,000 ४ $8 $288,000 Deluxe Abacus 36,000 12 V 432,000 Totals 72,000 $720,000 Production Budget The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels. You note that LearnCo has omitted six numbers from the following production budget and fil in the missing amounts. You may need to use numbers from the soles budget you prepared. LearnCo Production Budget For the Year Ending December 31, 20Y2 Units Basic Units Deluxe Expected units to be sold (from Sales Budget) 36,000 | ४ 36,000 V Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available 37,000V 39,000 Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units to be produced 35,950 V 36,900 Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year, Before you make any changes to the budget, you review the information on the foliowing Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Tabie), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 2. Deluxe abacus 3 Cost per package: Wood pieces $0.20 Beads $0.20 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 20Y2 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus Deluxe abacus Desired inventory, December 31, 20Y2 2,200 5,000 Total packages available Estimated inventory, January 1, 20Y2 (3,500) (4,500) Total packages to be purchased Unit price (per package) $58,310 Total direct materials to be purchased Direct Labor Cost Budget Direct labor needs from the direct labor cost budget shouid be coordinated between the production and personnel departments so that there will be enough labor available for production. Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Labor Data Table, or from the sales budget, production budget, and direct materiais purchases budget you prepared. When required, round your answers to the nearest dollar. Direct Labor Data Table Gluing Assembly Hours required per unit: Basic abacus 0.10 0.10 O Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $11 Assembly $19 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Labor Cost Budget For the Year Ending December 31, 20Y2 Gluing Assembly Total Hours required for production: Basic abacus Deluxe abacus Total Hourly rate Total direct labor cost $288,660 Factory Overhead Cost Budget The factory overhead cost budget should be integrated with the production budget to ensure that production is not interrupted during the year. This budget may be supported by departmental schedules, which normally separate factory overhead costs into fixed and variable costs so that department managers may monitor and evaluate costs during the year. For simplicity, LearnCo has not separated costs in this manner. After reviewing the following factory overhead cost budget, you note that LearnCo has completed the budget with the exception of one amount. Fill in the missing amount. LearnCo Factory Overhead Cost Budget For the Year Ending December 31, 20Y2 Indirect factory wages $5,400 Power and light Depreciation of plant and equipment 1,450 Total factory overhead cost $18,100 Cost of Goods Sold Budget The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget. Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared. LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2 Finished goods inventory, January 1, 20Y2 $9,870 Work in process inventory, January 1, 20Y2 $2,010 Direct materials: Direct materials inventory, January 1, 20Y2 $1,600 Direct materials purchases Cost of direct materials available for use Direct materials inventory, December 31, 20Y2 (1,440) Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Work in process inventory, December 31, 20Y2 (1,250) Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, December 31, 20Y2: (1,500) Cost of goods sold Selling/Admin. Expenses Budget The sales budget is often used as the starting point for the selling and administrative expenses budget. For example, a budgeted increase in sales may require more advertising expenses. LearnCo has prepared its selling and administrative expenses budget as follows. This budget is merely reviewed by you for use on the budgeted income statement. LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2 Selling expenses: Sales salaries expense $45,000 Advertising expense 15,000 Travel expense 5,400 Total selling expenses $65,400 Administrative expenses: Officers' salaries expense $85,000 Office salaries expense 35,000 Office rent expense 26,000 Office supplies expense 6,400 Miscellaneous administrative expenses 1,600 Total administrative expenses 154,000 Total selling and administrative expenses $219,400 Budgeted Income Statement The budgeted income statement is prepared by integrating the sales budget, cost of goods sold budget, and selling and administrative expenses budget. Additional information that may be helpful in preparing the budgeted income statement are on the following Budgeted Income Statement Data Table. Review the Budgeted Income Statement Data Table, then complete the budgeted income statement that follows the table. Round the computed amount for income tax to the nearest whole dollar. Budgeted Income Statement Data Table Interest revenue for the year $2,000 Interest expense for the year $1,500 LearnCo's income tax rate 40% LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses Administrative expenses Total selling and administrative expenses Operating income Other revenue and expense: Interest revenue Interest expense Income before income tax Income tax Net income
Expert Answer:
Related Book For
Posted Date:
Students also viewed these accounting questions
-
Inventory turnover is calculated as cost of goods sold divided by ending inventory . 1. True 2. False
-
Using the following information, calculate cost of goods sold for the year ended December 31, 2014. Merchandise inventory (January 1, 2014)..............................................................
-
Cost of goods sold for Harlem Tool & Die during 20X1 was $400,000. Beginning inventory was $64,000 and ending inventory was $89,000. Beginning trade accounts payable were $13,000, and ending trade...
-
Linda has d dollars in an account that pays 1.4% interest, compounded weekly. She withdraws w dollars. Express her first weeks interest algebraically.
-
Refer to the data for problem 6. a. Find the F statistic and its numbers of degrees of freedom. b. Interpret the F statistic in terms of how many times more volatile one source of variability is than...
-
Find each integral. cos 5x dx
-
An anonymous e-mail is sent to an internal auditor that there is fraud in the inventory/ warehousing cycle. Suggest some appropriate audit steps.
-
Operating leverage, margin of safety, and cost behavior In the early years of the 21st century the housing market in the United States was booming. Housing prices were increasing rapidly, new houses...
-
asasaasassa. PROBLEM 2-7 The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the year 2020. An...
-
The U.S. Department of Energys Fuel Economy Guide provides fuel efficiency data for cars and trucks (www.fueleconomy.gov). The file FuelEconomy2019 provides a portion of the data for 387 vehicles...
-
Required information Use the following information for the Exercises below. (Algo) [The following information applies to the questions displayed below] Textra produces parts for a machine...
-
The Li Group had 290,000 shares of common stock outstanding at January 1, 2024. The following activities affected common shares during the year. There are no potential common shares outstanding. 2024...
-
KBL Inc. with $20m funds available is seeking covered interest arbitrage (CIA) in Denmark Spot Rate = 6.15 (Kr/$) 3-month forward rate = 6.20 (Kr/S) 3-Month interest rate in US = 2.75% 3-month...
-
If Ana also have $90 to spend on food every month and face the same prices for junk food ($.5) other food ($1). Suppose that you cannot observe Ana' utility function, but you observe that each moth...
-
Determine the magnitude of the resultant force FR = F1+F2 in Newtons. Consider = 35 degrees and F = 500 N. 65 v 0 45 F2 F = 700 N
-
Calculate the stock's expected return for A stock's return with the following distribution: Products Demand Demand Rate Demand % Weak 0.2 30% Below average 0.2 10% Average 0.3 16% Above average...
-
10. The difference between a Master Budget and a Flexible Budgetis a. Master Budgets are always more important. b. Flexible Budgets are restated to actual results. c. Master Budgets are created on...
-
Chao, Louis, and Mari, unrelated individuals, own all of the shares of Cerise Corporation. All three shareholders have been active in the management of Cerise since its inception. In the current...
-
One of the younger workers in your production operations asks you, why do we have ending inventory at the end of the month? Why not just produce the exact quantity on the sales budget? How do you...
-
You own 5,000 shares of $4 par value common stock of Cohen & Cohen Hardware Corp. The company has 50,000 shares of common stock outstanding. Cohen & Cohen does not have any other classes of stock...
-
Dene and provide two examples of each of the following: (a) Operating activities. (b) Investing activities, and (c) nancing activities.
-
Elianne Vinas owns Vinas Shoe Company. She is contemplating the purchase of a cutting machine that would be used to make shoes in her factory. The following estimates are available: Required:...
-
Paola Grillon owns Grillon Skin Care Products. She is contemplating the purchase of an industrial mixer that would be used to mix cosmetics in her factory. The following estimates are available:...
-
Penny Williams is contemplating the purchase of a new computer system for her company, Williams Manufacturing. She has made the following estimates: Required: a. Determine the internal rate of return...
Study smarter with the SolutionInn App