Cost Accounting Final $2024$

The work must be your own and neatly prepared with clear identification of the budget you are preparing. All work must be in one EXCEL worksheet.

You have just been promoted to the position of controller at the Stanley Corporation. The company is based in Moosic, PA$.$ The company manufactures unfinished wooden book shelves.

Projected sales in units for the first six months:

January $20,000$

February $21,000$

March $26,000$

April $32,000$

May $37,000$

June $22,000$

The unit selling price is $$224.$

The following data relates to production policies and manufacturing specifications:

a$.$ Finished goods inventory on January $1$ is $1,800$ units. The desired ending inventory for each month is $22\%$ of the next month$$s sales.

b$.$ There is only one direct material used $$ wood. Eight units are used for each bookcase. The unit cost is $ $7\mathrm{.}22.$ Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy $30\%$ of the next month$$s production needs. This is exactly the amount of material on hand on January $1.$

c$.$ The direct labor used per unit of output is two hours. The hourly wage rate is $$26.$ All wages are subject to employer taxes of social security, medicare, and state$/$federal unemployment rate is $1\mathrm{.}5\%.$

d$.$ Monthly selling and administrative expenses are estimated using a flexible budget formula with activity measured in units sold.

Fixed Cost Component Variable Cost Component

Salaries $$165,000$

Commissions $ $2\mathrm{.}00$

Depreciation $$26,000$

Shipping $$7\mathrm{.}00$

Other $$150,000$ $$1\mathrm{.}00$

e$.$ All sales and purchases are for cash. The cash balance on January $1$ equals $ $75,000.$ The company wants to have an ending cash balance of at least $ $50,000.$ If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Cash is borrowed in $$1,000$ increments and repaid the following month, as is the interest due. The interest rate is $12\%$ per year.

Prepare a monthly operating budget, in good form, for the first quarter $2024($the company operates on a calendar year$)$ with the following schedules:

$1.$ Sales budget

$2.$ Production budget

$3.$ Direct materials purchases budget

$4.$ Direct labor budget

$5.$ Overhead budget

$6.$ Selling and administrative expense budget

$7.$ Ending finished goods inventory budget

$8.$ Cost of goods sold budget

$9.$ Budgeted income statement $($ignore income taxes$)$

$10.$ Cash budget