BUDGETING

BLACKPINK Corporation manufactures and sells two products. Hammerbong and Lightstick. The company Budget Department gathered the following data to project sales and budget requirements for the month of June 20B:

Projected Sales

Product---------Units-----Price

Hammerbong--12,000---P840

Lightstick-------6,900----P910

Inventories (units)

Product------Expected(5-31-20B)-----Desired(6-30-20B)

Hammerbong--------8,900--------------10,200

Lightstick-------------1,900---------------2,300

To produce one unit of Hammerbong and Lightstick, the following raw materials are used:

Amounts used per unit

Product---------------Plastic-------------LED Lights

Hammerbong---------14 pcs-------------2 pcs

Lightstick--------------19 pcs-------------3 pcs

Projected Data for 20B with respect to raw materials are as follows:

Raw Materials-------Expected5-31-20B--------Desired6-30-20B---AnticipatedPurchasePrice

Plastic--------------2,700------------------------2,300----------------------P13

LED Lights---------1,600-------------------------1,700----------------------P3.25

Projected Direct Labor requirements and rates for 20B are as follows:

Product------------Hour per unit-----Rate per hour

Hammerbong---------5-------------------P12

Lightstick--------------8-------------------P16

Factory overhead is applied at the rate of P3.75 per direct labor hour.

Other information are as follows:

-Materials purchases are entirely paid on the month of purchase.

-50% of Direct Labor are paid on the month of occurrence, while the remaining is paid after the month of occurrence. Direct labor hours incurred for the month of May is 10,000 hours for Hammerbong and 5,000 for Lightstick.

-FOH normally are paid on the month of occurrence.

-Sales are collected 40% on the month of sales to take advantage of the discount 3/10, n30 credit term and 60% on the month after. Sales on May was 8,000 units and 5,500 units for Hammerbong and Lightstick respectively. Assuming that we are on the month of June.

-Beginning cash balance is P50,000.

Required:

-Sales Budget

-Production Budget

-Raw Materials Purchase Budget

-Direct Labor Cost Budget

-Factory Overhead Budget

-Cash Budget