Question
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost
Developing a Master Budget for a Manufacturing Organization Jacobs Incorporated manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow:
Variable: | |
Selling and administrative | $5 per unit sold |
Direct materials | 10 per unit manufactured |
Direct labor | 10 per unit manufactured |
Variable manufacturing overhead | 5 per unit manufactured |
Fixed: | |
Selling and administrative | $20,000 per month |
Manufacturing (including depreciation of $10,000) | 30,000 per month |
Jacobs pays all bills in the month incurred. All sales are on account with 50 percent collected the month of sale and the balance collected the following month. There are no sales discounts or bad debts. Jacobs desires to maintain an ending finished goods inventory equal to 20 percent of the following month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1 inventories are in line with these policies. Actual unit sales for December and budgeted unit sales for January, February, and March are as follows:
JACOBS INCORPORATED Sales Budget For the Months of January, February, and March | ||||
---|---|---|---|---|
Month | December | January | February | March |
Sales - Units | 5,250 | 6,000 | 9,000 | 9,000 |
Sales - Dollars | $262,500 | $300,000 | $450,000 | $450,000 |
Additional information:
- The January 1 beginning cash is projected as $3,000.
- For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost.
- Each unit of finished product requires one unit of raw materials.
- Jacobs intends to pay a cash dividend of $7,000 in January.
NOTE: For the entire problem - do not use any negative signs with your answers unless appropriate for net income(loss) or ending balance.
(a) A production budget for January and February.
JACOBS INCORPORATED Production Budget For the Months of January and February | |||
---|---|---|---|
January | February | March | |
Requirements for current sales | Answer | Answer | Answer |
Desired ending inventory | Answer | Answer | |
Total requirements | Answer | Answer | |
Less beginning inventory | Answer | Answer | |
Production requirements | Answer | Answer |
(b) A purchases budget in units for January.
JACOBS INCORPORATED Purchases Budget For the Month of January | ||
---|---|---|
January | February | |
Current requirements (units) | Answer | Answer |
Desired ending inventory | Answer | |
Total requirements | Answer | |
Less beginning inventory | Answer | |
Purchases (units) | Answer | |
Purchases (dollars) | Answer |
(c) A manufacturing cost budget for January.
JACOBS INCORPORATED Manufacturing Cost Budget For the Month of January | ||
---|---|---|
Variable costs | ||
Direct materials | Answer | |
Direct labor | Answer | |
Variable manufacturing overhead | Answer | |
Total variable costs | Answer | |
Fixed manufacturing overhead | Answer | |
Total manufacturing costs | Answer |
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