13) Jones Corporation has the following budgeted sales for the selected four-month period:

Month

Unit Sales

July 20,000

August 35,000

September 25,000

October 30,000

Sales price per unit is $180

Plans are to have an inventory of

finished

product equal to 20 percent of the unit sales

for the next month. There was 4,000 units in beginning inventory on July 1st.

Three pounds of materials are required for each unit produced. Each pound of material

costs $20. Inventory levels for materials equal 30 percent of the needs for the next

month.

Desired ending inventory for September is 25,200 pounds of material. Beginning

inventory for July was 20,700 pounds of material.

Each unit requires .6 hours of direct labor and the average wage rate is $16 per hour.

Variable overhead rate is $3.50 per direct labor hour. There is also fixed overhead of

$22,000 per month.

The company pays a 3% commission on sales

Company has fixed selling and administrative expenses as follows:

Rent $6,000/month

Utilities 1,200/month

Advertising 400/month

Office Salaries 35,000/month

Required:

A.

Prepare a sales budget for July, August, and September and in total for the quarter.

B.

Prepare production budgets for July, August, and September and in total for the quarter.

C.

Prepare a direct materials purchases budget in pounds and dollars for July, August, and September and in total for the

quarter.

D.

Prepare a direct labor budget in hours and total cost for July, August and September and in total for the quarter.

E.

Prepare an overhead budget for July, August and September and in total for the quarter.

F.

Prepare a selling and administrative expenses budget for July, August and September and in total for the quarter.

G.

Prepare an ending finished goods inventory budget for the quarter (Hint: you have already calculated the desired ending

finished goods inventory amount and assume a stable per unit rate)

H.

Prepare a cost of goods sold budget for the quarter

I.

Prepare a budged income statement for the quarter-the company falls into the 35 percent tax bracket for income taxes.