Accounting $102$ Budget Project

Hitchen$$s Widget store Part $1$

The following information was provided by Hitchen$$s widget store for July $31,202$X$.$ They make two products: R$2$D$2$ & C$3$P$0.$ Both items use $2$ of the $3$ listed materials: Nada, Yada, and Bozo.

Presented below is monthly sales data for the two balls

R$2$D$2$ C$3$P$0$

Expected unit sales $772510950$

Expected price$/$unit $236152$

Beginning product inventory $700$ units $300$ units

Desired ending product inventory $500$ units $500$ units

Direct materials $-$ R$2$D$2$ uses Nada and C$3$P$0$ uses Yada for production. Both products require a Bozo.

Nada $($R$2$D$2$ only$)$ Yada $($C$3$P$0$ only$)$ Bozo $($both products$)$

Material $/$ unit $6\mathrm{.}45$ft $4\mathrm{.}85$ ft $1$ unit

Beginning DM Inv. $9,600$ ft $6,200$ ft $450$

Ending DM Inv $4,000$ ft $8,000$ ft $300$

Costs are $3\mathrm{.}95$per foot of Nada

Costs are $2\mathrm{.}62$per foot of Yada

Bozo$$s cost $$7\mathrm{.}85$ each

Direct Labor $-$ Each product requires the time listed below. R$2$D$2$ C$3$P$0$

Process #$11\mathrm{.}8$hours$/$unit $1\mathrm{.}1$hour$/$unit Paid $14\mathrm{.}6/$hr

Process #$22\mathrm{.}5$ hours$/$unit $1\mathrm{.}5$ hours$/$ unit Paid $$18/$hr

Factor Overhead is broken into variable and fixed costs. Variable costs are estimated by D$.$L hour of Process #$1.$ Fixed Costs are divided based on percent of Process #$1$ hours.

Variable Fixed

Indirect Materials $($$$3\mathrm{.}5/$hr$)$ Supervisor salary $$97,000$

Indirect Labor $($$$4\mathrm{.}8/$hr$)$ Depreciation $55200$

Utilities $(2\mathrm{.}5/$hr$)$ Property taxes and ins. $$48,500$

Other Selling and Admin Expenses not listed above

Advertising $168000$

Sales salaries $489,000$

Office salaries $136,000$

Income Tax percentage $=30\%$

Instructions:

Using the attached template fill$-$in sheet, complete all income statement budgets. Show all work for each budget

$1.$ Sales budget $$ Determine total sales for each item and the combined total.

$2.$ Production budget $$ Determine total units to be produced for each item and in total

$3.$ Direct Materials budget $$ Determine total feet and total cost of each material and in total.

$4.$ Direct Labor budget $$ Determine total hours and wage cost for each process and in total.

$5.$ Factory O$.$H$.$ budget $$ Determine the total variable cost, total fixed cost and manufacturing rate$/$hour using the cost driver.

$6.$ Determine the Cost of Goods Sold for each item and in total.

$7.$ Prepare the budgeted income statement for July $31,202$X

Hitchen's Widget Store $-$ Part $1$

Sales Budget R$2$D$2$ C$3$P$0$ Total

Expected unit sales

Expected price$/$unit

Total Sales $$

Production Budget R$2$D$2$ C$3$P$0$

Expected units to be sold

Plus Desired Ending Inventory

Less Beginning Inventory

Total units to be produced

Direct Materials $($DM$)$ Budget R$2$D$2$ C$3$P$0$ Both Total

Nada Yada Bozo

Units to be produced

DM$/$ft per unit $1$

Total ft

Plus Ending Inventory

Less Beg. Inventory

Total feet needed

Cost per foot

Total cost

Direct Labor $($DL$)$ Budget

Process $1$ R$2$D$2$ C$3$P$0$ Total

Units to be produced

DL time in hours $/$ unit

Hours Required

Wage$/$ hour

Total cost of wages

Process $2$ R$2$D$2$ C$3$P$0$ Total

Units to be produced

DL time in hours $/$ unit

Hours Required

Wage$/$ hour

Total cost of wages

Total DL wages

Factory Overhead $($FO$)$ Budget rate$/$hour R$2$D$2$ C$3$P$0$ Total

Indirect Indirect Materials

Indirect Labor

Utilities

Total Indirect $($variable cost$)$

R$2$D$2$ C$3$P$0$ Total

Direct Percent allocation

Supervisor

Depreciation

Prop. Taxes and Ins.

Total Direct $($Fixed Cost$)$

Total Manuf Overhead

Cost Driver $($process $1)$

Manuf. Rate$/$hour

COGS $/$ Unit R$2$D$2$ C$3$P$0$ Total

DM

Nada $/$ Yada

Bozo

Total DM

DL Process $1$

Process $2$

Total DL

FOH

Cost $/$ Process $1$

Total COGS$/$unit

Total units sold

Total COGS

Hitchen's Widget Store

Budgeted Income Statement

As of July