Assignment 3 ACCT 206 Part I - Budgeting Gnome Place Like Home LTD. manufactures small garden gnome statues and is working on next period's production budget. Each gnome needs 5 pounds of materials at a cost of $2 per pound and 1 hour 15 minutes of direct labor at a rate of $20 per hour. Variable overhead is charged at $1.50 per direct labor hour while fixed overhead for the period is budgeted at $50,000. The company's policy for materials is to have an ending balance equal to 25% of next month's materials requirement. The beginning materials balance for this period is 6,000 pounds. Units to be produced for this period is 12,000 while there are plans to produce 11,500 units in the following period. Using the excel template from Blackboard (use formulas wherever possible): A) Prepare the period's direct materials budget B) Prepare the period's direct labor budget C) Prepare the period's overhead budget Part II - Cost Allocation A computer/electronics company needs help figuring out how to allocate their rent bill to the operational departments of the business. The following information is known about the scenario: Department SGR Annual Rent Hardware 4500 Software 6000 Accessories 2000 Programming 3500 Total 22.000 $ 2,420,000 A. Use the excel template to build an allocation of the rent bill to the departments using square feet as the allocation base. B. The manager of Accessories thinks number of employees is a better measure and should be used in place of square feet. Do you agree or disagree? Support your position. Assignment 3 Template Review Share Comments Aloeve Home n. me RBEJ: Draw Page Layout Ciri 11 8 A B Formulas AA Data = View . 19 - E - Tet Corner g General $ % D . Condoom ! Test Form Fres ne period production Badested production Assignment 3 Template Share Comments AutoSave Home A Pere A BE J Draw Page Layout Formulas Ciri Boy) - 11AA IV A B. Data Review == View >> Ed 29 wastet Corner g General $ %) - 1 Condor ou ! a testes For Next period production (units): Desired Ending Balance %: Materials Budget Budgeted production units materials per unit materials needed for production budgeted ending inventory Total need beginning inventory material purchases Price per pound Cost of material purchases Labor Budget Budgeted production units Direct Labor per unit (hours) Total hours needed Labor rate Total cost of direct labor Overhead Budget Budgeted production units variable overhead rate budgeted variable overhead budgeted fixed overhead budgeted total overhead = = = -- - Merye 1 fx x B A C D E F G H I PARTA Total Rent cost: Sq. Ft % $$$ Department Hardware Software Accessories Programming Total PARTB