BUDGETS
#1 Create a sales budget.
Thunder Creek Company expects sales of 18,000 units in January 2018, 24,000 units in February, 30,000 units in March, 34,000 in April, and 36,000 in May. The sales price is $48 per unit.
#2 Create a production budget.
Thunder Creek wants to finish each month with 20% of next month's sales in units.
#3 Create a Direct Materials Budget
Thunder Creek Company uses 2 pounds of direct materials for each unit it produces, at a cost of $4.00 per pound. The company begins the year with 9,500 pounds of material in Raw Materials Inventory. Management desires an ending inventory of 25% of next month's materials requirements
#4 Create a Direct Labor Budget
Thunder Creek Company's workers require 30 minutes of labor to produce each unit of product. The labor cost is $20 per hour
Budget #5: Create a Manufacturing Overhead Budget
1. Thunder Creek Company prepares its Manufacturing Overhead Budget. For each direct labor hour, the variable overhead costs are: Indirect Materials = $1.00 per DLH; Indirect Labor Cost = $1.30 per DLH; Maintenance = $1.20 per DLH
2. The Fixed Overhead Costs per month are: Salaries of $40,000, Depreciation =$20,000 and Maintenance = $10,000.
3. ROUND the predetermined overhead allocation rate to two decimal places. Manufacturing overhead is allocated using direct labor hours.
Budget #6: Create a Cost of Goods Sold Budget
Thunder Creek Company uses the first-in, first-out (FIFO) inventory costing method.
The Beginning Finished Goods Inventory is $86,400 consisting of 3,600 units.
Budget #7: Selling and Administrative Expense Budget
Thunder Creek Company's variable supplies expense per month is $3.00 per unit. The fixed selling and administrative expenses per month consist of Salaries: $245,000; Advertising: $30,000; and Depreciation: $28,000
Budget #8: Budget Income from Continuing Operations (Tie it all together)		2018
		Jan	Feb	Mar	Q1 Total
Budgeted Sales Revenue					0
Budgeted Cost of Goods Sold					0
Budgeted Gross Profit					0
Budgeted Selling and Administrative Expenses					0
Budgeting Income from Continuing Operations		0	0	0	0