can someone help me find the direct labor and cogs budget please
Natsu Dragneel manufactures one kind of scarf. These scarves are white with black stripes. Each scarf sells for $17 and requires: - Raw Materials are $8 per linear foot of fabric and each scarf requires 0.5 linear foot of direct materials - 30 minutes of labor hours to manufacture the scarf (Labor cost is $16.00 per hour) Natsu Corp. has the following inventory policies: - Ending finished goods inventory should be 70% of next month's sales. Ending finished goods as of September 30th are 16,800 scarves. - Ending inventory of raw materials should be 20% of next month's production need. Ending raw materials inventory as of September 30th is 4,375 linear feet of material and the budgeted raw materials inventory is 1,980 linear feet of material. As per the Marketing and Sales department of the Natsu Corp., sales are high in the 2 month before winter weather occurs. Therefore, months of October and November are considered high demand months. In an August budget meeting of the current year, the Sales Manger provided following estimates of unit sales for the upcoming months (October current year-January next year): Variable manufacturing overhead is incurred at a rate of $2.70 per direct labor hour. Annual fixed manufacturing overhead is estimated to be $240,000 ( $20,000 per month). 240,000 scarves are anticipated to be produced each year. Fixed selling and administrative expenses are estimated at $12,500 per month and variable selling and administrative expenses are sales commissions and are estimated at 10% of sales. These commissions are paid in the same month of the sale. 1. Using the information provided above prepare the following budgets for the fourth quarter of the year (October - December) for Natsu Corporation. Include each month and quarter 4 (October - December) total for each budget. a. Sales budget b. Production budget c. Raw Materials budget - check figure for October =$50,760 d. Manufacturing Overheads budget e. Budgeted Cost of Goods Sold (COGS) f. Selling and administrative expenses budget 2. Prepare Natsu's budgeted income statement for quarter 4 (October - December). 3. Prepare the following for Natsu for quarter 4 : a. Budgeted cash receipts/collection each month (including quarter 4 total) b. Budgeted cash payments each month (including quarter 4 total) c. Cash budget of Natsu for quarter 4 . 4. After completing requirements 1-3 above revise the budget spreadsheet in a new worksheet to include following changes (you can copy and paste the current spreadsheet in a new worksheet to incorporate following changes): Natsu Corp. is contemplating to increase the selling price of the Scarves by 10% during the high sales months of October and November. The management of Natsu believes that it would affect unit sales marginally only, thereby, reducing unit sales by 5% in those two months. How would these two changes affect the net income of Quarter 4? What is net income from the original data and net income on the revised data? What is the difference in net income between the original data and the revised data? Based on the analysis, should Natsu Corp. increase the price of scarves temporarily during those high demand months? Include a short explanation in Excel file itself. (You need to revise your Excel spreadsheet to determine the effect on income statement. If you used your formulas correctly for requirements 1-3, you will not need to make whole lot of changes to your spreadsheet). 5. Save a copy of the Excel solution file after completing requirement 4 on your computer or flash drive. Direct Labor Budget October November December Quarter 4 Bud. Production (in units) DL hours per scart Bud. DL Hours needed for Production DL rate per hour (\$) Bud. DL cost (\$) MOH Budget October November December Quarter 4 Bud. Production (in units) Vac. MOH per scarf Bud. Total Var. MOH (\$) Bud. Total Fixed MOH (\$) Bud. TOTAL MOH (\$)
