Direct Materials Purchases Budget

The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year.

Before you make any changes to the budget, you review the information on the following Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Table Below:

Direct Labor Cost Budget

Direct labor needs from the direct labor cost budget should be coordinated between the production and personnel departments so that there will be enough labor available for production.

Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Labor Data Table, or from the sales budget, production budget, and direct materials purchases budget you prepared. When required, round your answers to the nearest dollar. Table Below:

Factory Overhead Cost Budget

The factory overhead cost budget should be integrated with the production budget to ensure that production is not interrupted during the year. This budget may be supported by departmental schedules, which normally separate factory overhead costs into fixed and variable costs so that department managers may monitor and evaluate costs during the year. For simplicity, LearnCo has not separated costs in this manner.

After reviewing the following factory overhead cost budget, you note that LearnCo has completed the budget with the exception of one amount. Fill in the missing amount. Table Below:

Cost of Goods Sold Budget

The cost of goods sold budget integrates the direct materials purchases budget, direct labor cost budget, and factory overhead cost budget. Estimated and desired inventories for direct materials, work in process, and finished goods must also be integrated into the cost of goods sold budget.

Complete the preparation of the cost of goods sold budget for LearnCo, using information that follows provided by the controller, and using the previous budgets you have prepared. Table Below:

Selling/Admin. Expenses Budget

The sales budget is often used as the starting point for the selling and administrative expenses budget. For example, a budgeted increase in sales may require more advertising expenses. LearnCo has prepared its selling and administrative expenses budget as follows. This budget is merely reviewed by you for use on the budgeted income statement. Table Below:

Budgeted Income Statement

The budgeted income statement is prepared by integrating the sales budget, cost of goods sold budget, and selling and administrative expenses budget. Additional information that may be helpful in preparing the budgeted income statement are on the following Budgeted Income Statement Data Table.

Review the Budgeted Income Statement Data Table, then complete the budgeted income statement that follows the table. Round the computed amount for income tax to the nearest whole dollar. Table Below:

Direct Materials Data Table Wood Pieces Beads 1 2. 3 2 Packages required per unit: Basic abacus Deluxe abacus Cost per package: Wood pieces Beads Units to be produced (from Production Budget): Basic abacus $0.25 $0.25 Deluxe abacus Total LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 20Y2 Direct Materials Wood Pieces Beads Packages required for production: Basic abacus 35,950 71,900 Deluxe abacus 73,800 110,700 Desired inventory, December 31, 2,200 5,000 20Y2 Total packages available 111,950 187,600 Estimated inventory, January 1, 20Y2 (3,500) (4,500) Total packages to be purchased 108,450 183,100 Unit price (per package) 0.25 x $ 0.25 Total direct materials to be purchased 27,113 45,775 $72,888 Direct Labor Data Table Gluing Assembly Hours required per unit: Basic abacus 0.10 0.10 Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $11 Assembly $17 Units to be produced (from Production Budget): Basic abacus 35,950 Deluxe abacus 36,900 LearnCo Direct Labor Cost Budget For the Year Ending December 31, 20Y2 Gluing Assembly Hours required for production: Total Basic abacus 3,595 3,595 Deluxe abacus 3,690 7,380 Total 7,285 10,975 Hourly rate X $ 11 X $ 17 Total direct labor cost 80,135 $ 186,575 $266,710 LearnCo Factory Overhead Cost Budget For the Year Ending December 31, 20Y2 Indirect factory wages $5,400 Power and light 11,250 Depreciation of plant and equipment 1,450 Total factory overhead cost $18,100 Feedback Check My Work $9,870 $2,010 LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2 Finished goods inventory, January 1, 20Y2 Work in process inventory, January 1, 2012 Direct materials: Direct materials inventory, January 1, 2012 $2,000 Direct materials purchases Cost of direct materials available for use Direct materials inventory, December 31, 20Y2 (1,800) Cost of direct materials placed in production Direct labor $ $9,870 $2,010 LearnCo Cost of Goods Sold Budget For the Year Ending December 31, 20Y2 Finished goods inventory, January 1, 20Y2 Work in process inventory, January 1, 2012 Direct materials: Direct materials inventory, January 1, 20Y2 $2,000 Direct materials purchases Cost of direct materials available for use Direct materials inventory, December 31, 20Y2 (1,800) Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during period Work in process inventory, December 31, 20Y2 Cost of goods manufactured Cost of finished goods available for sale Finished goods inventory, December 31, 20Y2 Cost of goods sold (1,250) (1,500) $ $65,400 LearnCo Selling and Administrative Expenses Budget For the Year Ending December 31, 20Y2 Selling expenses: Sales salaries expense $45,000 Advertising expense 15,000 Travel expense 5,400 Total selling expenses Administrative expenses: Officers' salaries expense $85,000 Office salaries expense 35,000 Office rent expense 26,000 Office supplies expense 6,400 Miscellaneous administrative expenses 1,600 Total administrative expenses Total selling and administrative expenses 154,000 $219,400 Budgeted Income Statement The budgeted income statement is prepared by integrating the sales budget, cost of goods Data Table. Review the Budgeted Income Statement Data Table, then complete the budgeted income sta Budgeted Income Statement Data Table Interest revenue for the year $2,000 Interest expense for the year $1,500 LearnCo's income tax rate 40% LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2 Revenue from sales LearnCo Budgeted Income Statement For the Year Ending December 31, 20Y2 Revenue from sales Cost of goods sold Gross profit Selling and administrative expenses: Selling expenses $ Administrative expenses Total selling and administrative expenses Operating income Other revenue and expense: Interest revenue $ Interest expense Income before income tax Income tax Net income $