Cost planning

Mini-Exercises from 14.1 to 14.6

All applicable Mini-Exercises are available in Connect. 1i-Exercise Production budget ABC Company's budgeted sales for June, July, and August 14.1 are 12,000,16,000, and 14,000 units, respectively. ABC requires 30% of the next LO 4, LO 5 month's budgeted unit sales as finished goods inventory each month. Budgeted end. ing finished goods inventory for May is 3,600 units. Required: Calculate the number of units to be produced in June and July. i-Exercise Purchases budget In addition to the information presented in Mini-Exercise 14,1. 14.2 each unit that ABC Company produces uses 3 pounds of raw material. ABC requires LO 4, LO 525% of the next month's budgeted production as raw material inventory each month. Required: Calculate the number of pounds of raw material to be purchased in June. Chapter 14 Cost Planning 533 Operating expense budget In addition to the information presented in Mini- Mini-Exercise Elercise 14.1, the following cost behavior patterns are budgeted for ABC Company's 14.3 iperiting expenses each month: Fixed costs: salaries. $2,000; rent, $5,000; depreciation, $2,400; advertising, $3,200 Mixed costs: utilities, $3,000+$0.50 per unit Variable costs per unit sold: sales commissions, $2.00; marketing promotions, S1.00; supplies, $0.75; bad debt expense, $0.25 Required: Prepare ABC Company's operating expense budget for June, July, and August. Cash receipts analysis In addition to the information presented in Mini-Exercise Mini-Exercise 14.1, the selling price for each unit is $18. Based on past experience, ABC expects that 14.4 30% of a month's sales will be collected in the month of sale, 60% in the following 14.4 month, and 8% in the second month following the sale. Required: Prepare an analysis of cash receipts from sales for ABC Company for August. Cash budget In addition to the information presented in Mini-Exercise 14.4, ABC Mini-Exercise Company has a cash balance of $25,000 on August 1 and requires a minimum ending 14.5 cash balance of $20,000. Cash disbursements budgeted for August include inventory LO 8 purchases, $40,000; other manufacturing expenses, $98,000; operating expenses. $76,200; bond retirements, $50,000; and dividend payments, $15,000. Required: Prepare a cash budget for ABC Company for August. Standard product cost In addition to the information presented in Mini-Exercises Mini-Exercise 14.1 and 14.2, ABC Company currently pays a standard rate of $1 per pound for raw 14.6 materials. Each unit should be produced in 15 minutes of direct labor time at a stan- LO 10 dard direct labor rate of $12 per hour. Manufacturing overhead is applied at the standard rate of $16 per direct labor hour. Required: Calculate the standard cost per unit for ABC Company