Additional Information a. Budgeted sales are 1,500 youth bats and 3.000 adult bats. b. Finished Goods Inventory on December 31 consists of 500 youth bats at $15 each and 750 adult bats at $17 each. c. Desired ending Finished Goods Inventory is 300 youth bats and 450 adult bats; FIFO inventory costing method is used. d. Direct materials cost is $8 per youth bat and $10 per adult bat. e. Desired ending Raw Materials Inventory is $11,000 (indirect materials are insignificant and not considered for budgeting purposes). f. Each bat requires 0.25 hours of direct labor, direct labor costs average $20 per hour g. Variable manufacturing overhead is $0.75 per bat. h. Fixed manufacturing overhead includes $1,000 per quarter in depreciation and $2,000 per quarter for other costs, such as insurance and property taxes. i. Fixed selling and administrative expenses include $10,000 per quarter for salaries: $3,000 per quarter for rent: $1,500 per quarter for insurance, and $300 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 1% of sales. Requirements 1. Prepare a sales budget for the first quarter of 2019. 2. Prepare a production budget for the first quarter of 2019. 3. Prepare a direct materials budget, direct labor budget, and manufacturing overhead budget for first quarter of 2019. Round the predetermined overhead allocation rate to two decimal places. 4. Prepare a cost of goods sold budget for first quarter of 2019. 5. Prepare a selling and administrative expense budget for first quarter of 2019. Managerial Accounting - Chapter 22 Requirement 1: Sales Budget Northwest Bat Company Sales Budget For the Quarter Ended March 31, 2019 Youth Adult Bats Bats Total Budgeted bats to be sold 1,500 3,000 4.500 Sales price per unit $ Os 65 Total sales $ 195,000 $ 247 500 Additional Info Item a for bats. Intro paragraph for sales price per unit. Note the format of Sales Budget Requirement 2: Production Budget Northwest Bat Company Production Budget For the Quarter Ended March 31, 2019 Youth Adult Bats Bats Total From Sales Budget 1,500 300 3.000 450 4,500 750 Info item Budgeted bats to be sold Plus: Desired bats in ending inventory Total bats needed Less: Bats in beginning inventory Budgeted bats to be produced 1,800 5.250 3.450 750 4 Info item b 2,700 Adult Bats From Production Budget Total Requirement 3: Direct Material Budget Northwest Bat Company Direct Materials Budget For the Quarter Ended March 31, 2019 Youth Bats Budgeted bats to be produced 1,300 Direct materials cost per unit $ Direct materials needed for production 6. Plus: Desired direct materials in ending inventory Total direct materials needed Less: Direct materials in beginning inventory Budgeted purchases of direct materials 4,000+ 2,700 10 $ Info item d. $ 27.000 $ Info item 48.400 11,000+ From Balance 37 400 Sheet 5 Requirement 3 continued - Chapter 22 Northwest Bat Company Direct Labor Budget For the Quarter Ended March 31, 2019 Youth Adult From Bats Bats Total Production Budgeted bats to be produced 1,300 Budget 2,700 4.000 Direct labor hours per unit 025 025 025 Direct labor hours needed for production 325 675 Info Item Direct labor cost per hour 20 $ 20 $ 20 Budgeted direct labor cost $ 6.500 5 13.500 5 20 000 1.000 Requirement 3 continued Northwest Bat Company Manufacturing Overhead Budget For the Quarter Ended March 31, 2019 Youth Adult Bats Bats Total From Production Budget 1,300 2,700 4,000 0.75 $ 0.75 s 0.75 $ Info item $ 975 $ 2,025 S 3,000 Budgeted bats to be produced VOH cost per bat Budgeted VOH Budgeted FOH Depreciation Insurance and property taxes Total budgeted FOH Budgeted manufacturing overhead costs 1,000 2,000 Info item h. 3,000 VOH 3,000+ FOH 3,000 $ 6.000 Direct Labor Budget 325 675 1,000 Direct labor hours Budgeted manufacturing overhead costs Predetermined overhead allocation rate $ 6.000 $ 6.00 From Overhead budget Requirement 4: Cost of Goods Sold Budget Calculate the projected manufacturing cost per bat for 2019 will be useful in the CGS Budget) ccounting - Chapter 22 Youth Bas A Bas Direct materials cost per bal Direct labor cost per bal Manufacturing overhead cost per bal Info temd 500 150 500 Total projected mandacturing cost perb 2019 Info Item 125 x 5201 1550 16,000 OH 4,000 bats (from production budget Northwest Bat Company Cost of Goods Sold Budget For the Quarter Ended March 31, 2019 Youth Adult Bats Bats Beginning inventory 7.500 +12.750 5 Bats produced and sold For Quarter ended Mar. 31 14,500 37,125 Total budgeted cost of goods sold 22.000$ 49 875 S Toket Info Item (500 x $15) $ 20.250 1750 x $17) 51.625 $ 71.875 1,800 Youth Bats are needed (Prod. Budget) but 500 will come from Beg. Inventory, so 1,300 will be produced. Not all of 1,300 will be sold because the company will have 300 in ending inventory. So, 1,000 unit were produced and SOLD: CGS of those 1,000+ 1,000 x $14.50 cost per bat (from above) 3,450 Adult Bats are needed (Prod. Budget) but 750 will come from Beg. Inventory, so 2,700 will be produced. Not all of 2,700 will be sold because the company will have 450 in ending inventory. So, 2,250 units were produced and SOLD: CGS of those 2,250 -2.250 x $16.50 cost per bat (from above) Requirement 5: Selling and Administrative Expense Budget 3,000 Northwest Bat Company Selling and Administrative Expense Budget For the Quarter Ended March 31, 2019 Salaries Expense Rent Expense Insurance Expense Depreciation Expense Supplies Expense Total budgeted selling and administrative expense $ Info itemi. 1,500 300 Info item j. (budgeted sales x 1%) 17.275