Budget Assignment

Question # 1.

Jent Company reported the following information for 2019:

October November December

Budgeted sales $320,000 $340,000 $360,000

Budgeted purchases $120,000 $128,000 $144,000

All sales are on credit.

Customer amounts on account are collected 40% in the month of sale and 60% in the following month.

Instructions

Compute the amount of cash Jent should receive during November. (No table required, but do show your calculations)

Question # 2.

Garver Industries has budgeted the following unit sales:

2022 Units

January 10,000

February 8,000

March 9,000

April 11,000

May 15,000

The finished goods units on hand on December 31, 2021, was 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2021.

Instructions

For the first quarter of 2022, prepare (1) a production budget and (2) a direct materials budget. (examples on pages 15-10 and 15-11 respectively)

Question # 3.

Thread Company is preparing its manufacturing overhead budget for 2022. Relevant data consist of the following.

Units to be produced (by quarters): 10,000, 12,000, 14,000, 16,000.

Direct labor: Time is 1 hour per unit.

Variable overhead costs per direct labor hour: Indirect materials $0.80; indirect labor $1.20; and maintenance $0.50.

Fixed overhead costs per quarter: Supervisory salaries $42,000; depreciation $16,000; and maintenance $12,000.

Instructions

Prepare the manufacturing overhead budget for the year, showing quarterly data. (example on page 15-15 of textbook)

Question # 4.

Point, Inc. produces men's shirts. The following budgeted and actual amounts are for 2022:

Cost Budget at 2,500 units Actual Amounts at 2,800 units

Direct materials $65,000 $75,000

Direct labor 70,000 78,000

Fixed overhead 35,000 34,500

Instructions

Make a static budget report for Point, Inc. for the year. (example on page 16-6 in textbook)

Question # 5.

Beal Manufacturing Co.'s static budget at 12,000 units of production includes $72,000 for direct labor and $12,000 for direct materials. Total fixed costs are $48,000.

Instructions

1. Determine how much would appear on Beal's flexible budget for 2022 if 18,000 units are produced and sold. (illustration 16.10 on page 16-9 of textbook)