Assignment:

Fast Mobile company approached you as Management Accounting expert to assist them in preparing their 2022 budget.

They provided you with the following data:

Expected number of units to be sold in 2022

o Model 1: 14,000 units

o Model 2: 9,000 units

Expected selling Price

o Model 1: $250

o Model 2: $200

Each model requires 5 components (camera, keypad, screen, frame, and motherboard). Model 1 has 2 cameras, while model 2 has only 1 camera.

Component prices are as follows:

o Camera: $15

o Keypads: $10

o Screen: $20

o Frame: $3

o Motherboard: $12

The company already had a beginning inventory of 3,000 units of each of the above components at a cost of:

o Camera: $12.50

o Keypads: $9

o Screen: $18

o Frame: $2.75

o Motherboard: $11.50

No ending inventory of any component item or finished goods is required.

Both Mobile models need 5.5 hours of labor at a cost of $5.00 per hour.

Overhead is allocated at a rate of $15 per direct labor hour.

Required:

Prepare the following for the year 2022:

o Sales Budget

o Component Budget

o Direct Labor Budget

o An overhead Budget

Prepare a budgeted partial income statement for 2022 till Gross Profit Line