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Micro Products Inc. has developed a very powerful electronic calculator. Each calculator requires three small chips that cost $4 each and are purchased from an overseas supplier. Micro Products has prepared a production budget for the calculator by quarters for year 2 and for the first quarter of year 3, as shown below: Year2 Year3 First Second Third Fourth First Budgeted production, in 73,000 103,000 163000113000 93000 calculators The chip used in production of the calculator is sometimes hard to get, so it is necessary to carry large inventories as a precaution against stock-outs. For this reason, the inventory of chips at the end of a quarter must be equal to 20% of the following quarter's production needs. A total of 49,000 chips will be on hand to start the first quarter of year 2. Required: Prepare a direct materials purchases budget for chips, by quarter and in total, for year 2. At the bottom of your budget, show the dollar amount of purchases for each quarter and for the year in total. : Auto Lavage is a Canadian company that owns and operates a large automatic carwash facility near Quebec. The following table provides data concerning the company's costs: '22:? Cost per per Car Month Washed Cleaning supplies $0.70 Electricity $3,200 0.10 Maintenance 0.30 Wages and salaries 6,500 0.40 Depreciation 10,100 Rent 3,900 Administrative 3,600 0.06 expenses The company expects to charge customers an average of $7.70 per car washed. Required: Prepare a flexible budget for October assuming either 10,500 or 11,500 cars are washed. AUTO LAVAGE INC. Flexible Budget For the Month Ended October 31 Budgeted Amount Per Cars Washed Unit (per car) 10,500 11,500 Variable expenses: Total variable expenses Fixed expenses: Total fixed expensesAdd: Beginning inventory - Add: Ending inventory Deduct: Beginning inventory Deduct: Ending inventory 2. Prepare the company's direct labour budget for the next fiscal year, assuming that the direct labour workforce is not adjusted each quarter. Instead, assume that the company's direct labour workforce consists of permanent employees who are guaranteed to be paid for at least 5,700 hours of work each quarter. If the number of required direct labourhours is less than this number, the workers are paid for 5,700 hours anyway. Any hours worked in excess of 5,700 hours in a quarter are paid at a rate of 1.5 times the normal hourly rate for direct labour. Total direct labor hours needed Regular hours paid Overtime hours paid Overtime wages Total direct labor cost Wages for regular hours The manufacturing division manager of Davison Enterprises has submitted the following production forecast (in units) for each quarter of the next fiscal year. The plant produces seats for motorcycles: First Second Third Quarter Quarter Quarter Fourth Quarter Units to be produced 10,000 9,400 9,500 9,900 Each unit requires 0.60 direct labourhours, and employees are paid $13 per hour. Required: 1. Prepare the company's direct labour budget for the upcoming fiscal year, assuming that the direct labour workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units. Micro Products, Inc. Direct Materials Budget - Year 2 Quarter First Second Third Fourth Year Required production in calculators Number of chips per calculator Production needs-chips Total needs Required purchases-chips Total cost of purchases
