Direct Material Budget Prepare a direct material budget for the following product sold by Almond Delights Use the information provided below How many lbs of almonds are needed per quarter and how much will they cost? Product: box of 24 almond cookies (Material - almonds) Units to be produced per quarter: see chart below (as per the production budget) Quantity of almonds per box of cookies: 1.2lbs Each lb of almonds costs $ 1.25 Beginning inventory in quarter 1 is 10,000lbs Desired inventory 10% Note it takes other materials to make the almond cookies (ex: sugar, flour etc.) Q3 Q1 02 04 Year Units to be produced 200.000 257,000 220.000 305.000 15,000 15,000 X Quantity of raw material needed per unit (In lbs) = Production needs in libs + Desired ending inventory of raw material Total needs - Beginning inventory of raw material Raw materials to be purchased Cost of raw materials 10,000 10,000 per lb) Cost of raw materials to be purchased Direct Labor Budget Complete the Direct labor budget given the information below: It takes 15 minutes (0.25) to make I box of almond cookies The direct labor cost per hour is $15.00 What is the total labor cost per quarter and for the year end? 101 02 103 104 Year Units to be produced 200,000|257,000 220,000 305,000 Direct labor hours per unit Total Direct Labor hours needed Direct Labor cost per hour Total Direct Labor cost Cost of goods sold Complete the cost of goods sold based on the information below: Note: The Sales in units is based on numbers provided in the Sales budget (basing it on selling price per unit $7.25) Note: Direct material cost per unit equals the cost of all ingredients to make 1 box of almond cookies (2.75) Note: Direct labor cost per unit will the cost of labor to make 1 box of cookies (calculate based on the labor cost budget above) 1 04 Sales in Units 185,000 225.000 200.000 285,000 02 1Q3 Year Direct materials (52.75 per unit) Direct labor) Variable overhead (S.20 per unit) Fixed overhead S48,000 $48,000S48,000 $48,000 Cost of goods sold Selling and Administrative Expense Budget Use the information below to complete the Selling Administrative Budget Selling expenses are $1.20 per unit sold Administrative expenses are $78,000 per quarter . We can calculate Almond Delights Selling and Administrative Expense Budget using the information below: For selling expenses, we will take the sales in units x $.50 variable selling expense per unit. Administrative expenses are fixed so they will not change based on volume ($48,000). Fixed expenses include depreciation on the office building of $ 8,000 per quarter. Qi Q2 03 04 Year Selling Expenses Formula: Current 185,000 x $.50.225,000 200,000285,000 quarter units sold x S.50 per unit) Administrative Expenses Less office and Building depreciation Total Cash payments for selling and admin. Expenses
