Do all the requirements.
| Sharpe Batting Company |
| Balance Sheet |
| December 31, 2016 |
| Assets |
| Current Assets: | |
| Cash | $40,000 | |
| Accounts Receivable | 16,700 | |
| Raw Materials Inventory | 13,000 | |
| Finished Goods Inventory | 12,120 | |
| Total Current Assets | $81,820 |
| Property, Plant, and Equipment: | | |
| Equipment | 135,000 | |
| Less: Accumulated Depreciation | (45,000) | 90,000 |
| Total Assets | $171,820 |
| Liabilities |
| Current Liabilities: | | |
| Accounts Payable | | $16,500 |
| Stockholders' Equity |
| Common Stock, no par | $120,000 | |
| Retained Earnings | | 35,320 | |
| Total Stockholders' Equity | | 155,320 |
| Total Liabilities and Stockholders' Equity | | $171,820 |
The Sharpe Batting Company manufactures wood baseball bats. Sharpe's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Sharpe sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $35; the adult bat sells for $60. Sharpe's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Sharpe's balance sheet for December 31,2016 , follows: (Click the icon to view the balance sheet.) Other data for Sharpe Batting Company for the first quarter of 2017 : (Click the icon to view the other data.) Read the Requirement 1. Prepare Sharpe's sales budget for the first quarter of 2017. a. Budgeted sales are 1,900 youth bats and 2,800 adult bats. b. Finished Goods Inventory on December 31 consists of 350 youth bats at $12 each and 720 adult bats at $11 each. c. Desired ending Finished Goods Inventory is 250 youth bats and 240 adult bats; FIFO inventory costing method is used. d. Direct materials cost is $8 per youth bat and $5 per adult bat. e. Desired ending Raw Materials Inventory is $13,000 (indirect materials are insignificant and not considered for budgeting purposes). f. Each bat requires 0.7 hours of direct labor; direct labor costs average $20 per hour. g. Variable manufacturing overhead is $0.80 per bat. h. Fixed manufacturing overhead includes $800 per quarter in depreciation and $21,860 per quarter for other costs, such as insurance and property taxes. i. Fixed selling and administrative expenses include $5,000 per quarter for salaries; $1,500 per quarter for rent; $1,000 per quarter for insurance; and $400 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 5% of sales. Requirements 1. Prepare Sharpe's sales budget for the first quarter of 2017. 2. Prepare Sharpe's production budget for the first quarter of 2017. 3. Prepare Sharpe's direct materials budget, direct labor budget, and manufacturing overhead budget for the first quarter of 2017 . Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours. 4. Prepare Sharpe's cost of goods sold budget for the first quarter of 2017. 5. Prepare Sharpe's selling and administrative expense budget for the first quarter of 2017. The Sharpe Batting Company manufactures wood baseball bats. Sharpe's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Sharpe sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $35; the adult bat sells for $60. Sharpe's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Sharpe's balance sheet for December 31,2016 , follows: (Click the icon to view the balance sheet.) Other data for Sharpe Batting Company for the first quarter of 2017 : (Click the icon to view the other data.) Read the Requirement 1. Prepare Sharpe's sales budget for the first quarter of 2017. a. Budgeted sales are 1,900 youth bats and 2,800 adult bats. b. Finished Goods Inventory on December 31 consists of 350 youth bats at $12 each and 720 adult bats at $11 each. c. Desired ending Finished Goods Inventory is 250 youth bats and 240 adult bats; FIFO inventory costing method is used. d. Direct materials cost is $8 per youth bat and $5 per adult bat. e. Desired ending Raw Materials Inventory is $13,000 (indirect materials are insignificant and not considered for budgeting purposes). f. Each bat requires 0.7 hours of direct labor; direct labor costs average $20 per hour. g. Variable manufacturing overhead is $0.80 per bat. h. Fixed manufacturing overhead includes $800 per quarter in depreciation and $21,860 per quarter for other costs, such as insurance and property taxes. i. Fixed selling and administrative expenses include $5,000 per quarter for salaries; $1,500 per quarter for rent; $1,000 per quarter for insurance; and $400 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 5% of sales. Requirements 1. Prepare Sharpe's sales budget for the first quarter of 2017. 2. Prepare Sharpe's production budget for the first quarter of 2017. 3. Prepare Sharpe's direct materials budget, direct labor budget, and manufacturing overhead budget for the first quarter of 2017 . Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours. 4. Prepare Sharpe's cost of goods sold budget for the first quarter of 2017. 5. Prepare Sharpe's selling and administrative expense budget for the first quarter of 2017
