Delos Manufacturing Company makes two basic products, Cee and Dee. Data assembled by the managers is

The direct labour wage rate is $14 per hour. Overhead is applied on the basis of direct labour hours. The tax rate is 40 percent.
The budgeted sales level is divided into quarters. Delos estimates that 20 percent of the an- nual sales will be in the first quarter, 30 percent in the second, and 25 percent in the third and fourth quarters. The beginning inventory of finished products has the same cost per unit as the ending inventory. The work-in-process inventory is negligible.
Delos Manufacturing Company
Sales Forecasts by Products 2014

Factory Overhead Costs

Required:
Prepare the following:
a. Production budget
b. Direct materials purchase budget
c. Direct labour budget
d. Cost of goods sold budget
e. Budgeted income statement.
Because you are given inventory values for the beginning and the end of the year, it is impossible to construct budgets by quarter. The budgets should be presented for the whole year.

Transcribed Image Text:

Ce Dee Requirements for finished unit: 8 kg 4 kg 1 unit 8 hours $200 Raw material 1 10 kg Raw material 2 Raw material 3 2 units 5 hours Direct labour Sales price Sales units $150 12,000 9,000 Estimated beginning inventory Desired ending inventory 400 150 200 300 Raw Materials 3 $ 2.00 per kilogram $ 2.50 per kilogram $ 0.50 per unit 1,000 1,500 Cost Estimated beginning inventory Desired ending inventory 3,000 4,000 1,500 1,000