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4. Master Budget (6pts): Frozen Britain, Corp. makes one product, frozen pizzas, and it provided the following information to help prepare the master budget for
4. Master Budget (6pts): Frozen Britain, Corp. makes one product, frozen pizzas, and it provided the following information to help prepare the master budget for the next several months of operations:
- The budgeted selling price per unit is $8.00. Budgeted unit sales for March, April, May, June, July, and August are 55,000; 56,900; 57,400; 58,000; 57,600; and, 58,200 units, respectively. All sales are on credit.
- Regarding credit sales, 10% are collected in the month of the sale and 90% in the following month.
- The ending finished goods inventory equals 30% of the following month's sales.
- The ending raw materials inventory equals 40% of the following months raw materials production needs. Each unit of finished goods requires 12 grams of raw materials. The raw materials cost $0.16 per gram.
- Regarding raw materials purchases, 10% are paid for in the month of purchase and 90% in the following month.
- The direct labor wage rate is $15.00 per hour. Each unit of finished goods requires 0.2 direct labor-hours.
- Variable overhead is $2.50 per direct labor-hour. Assume there is no Fixed OH.
- The variable selling, general, and administrative expense per unit sold is $1.05. The fixed selling, general and administrative expense per month is $56,420.
- Prepare the sales budget for the four-month budget period of April, May, June, and July. Use proper formatting, making sure to include the firms name, the name of the budget, and the budget period. (1pt)
- Prepare the production budget for the four-month budget period of April, May, June, and July. Use proper formatting, making sure to include the firms name, the name of the budget, and the budget period. (1pt)
- Calculate the budgeted direct material cost for June. (0.5pts)
- Calculate the budgeted direct labor cost for June. (0.5pt)
- Calculate the budgeted OH cost for June. (0.5pt)
- Calculate the budgeted per unit product cost. (0.5pt)
- Calculate the budgeted Selling, General and Administrative expenses for June. (0.5pt)
- Calculate budgeted net income for the month of June. Assume interest expense is $300 for June and income taxes are assessed at 30% (0.5pt)
- Calculate the budgeted Accounts Receivable (A/R) balance that would appear on the budgeted balance sheet as of June 30th (0.5pts)
- Calculate the budgeted finished goods inventory dollar amount that would appear on the budgeted balance sheet as of June 30th (0.5pts)
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