eBook Show Me How Video Sales and Production Budgets Bass Audio Company manufactures two models of speakers, U500 and S1000. Based on the following production and sales data for June. U500 S1000 Estimated inventory (units), June 1 12,500 5,000 Desired inventory (units), June 30 15,000 7,500 Expected sales volume (units): Northeast Region 70,000 50,000 Southwest Region 80,000 62,500 Unit sales price $45 $80 a. Prepare a sales budget. Enter all amounts as positive numbers. BASS AUDIO COMPANY Sales Budget For the Month Ending June 30 Product and Area Unit Sales Volume Unit Selling Price Total Sales Model U500: Northeast Region Southwest Region Total Model S1000: Northeast Region Southwest RegionTotal Model S1000: Northeast Region Southwest Region Total Total revenue from sales Feedback Check My Work a. For each region and each model, multiply unit sales volume by unit selling price. b. Prepare a production budget. BASS AUDIO COMPANY Production Budget For the Month Ending June 30 U500 S1000 Expected units to be sold Plus desired inventory, June 30 Total Less estimated inventory, June 1 Total units to be producedCost of Goods Sold Budget The controller of Pueblo Ceramics Inc. wishes to prepare a cost of goods sold budget for April. The controller assembled the following information for constructing the cost of goods sold budget: Direct materials: Enamel Paint Porcelain Total Total direct materials purchases budgeted for April $35,000 $6,000 $140,000 $181,000 Estimated inventory, April 1 3,000 750 9,250 13,000 Desired inventory, April 30 3,200 1,000 10,800 15,000 Direct labor cost: Kiln Department Decorating Department Total Total direct labor cost budgeted for April $38,000 $162,000 $200,000 ) Budgeted factory overhead costs for April: Indirect factory wages $71,500 Depreciation of plant and equipment 19,000 Power and light 12,300 Indirect materials 4,200 Total $107,000 Work in process inventories: Estimated inventory, April 1 $11,400 Desired inventory, April 30 9,500 Finished goods inventories: Dish Bowl Figurine Total Estimated inventory, April 1 $4,500 $3,000 $2,500 $10,000 Desired inventory, April 30 4,000 750 1,250 6,000 Use the preceding information to prepare a cost of goods sold budget for April. PUEBLO CERAMICS INC. Cost of Goods Sold Budget For the Month Ending April 30 Finished goods inventory, April 1 Work in process inventory, April 1 tA Direct materials: Direct materials inventory, April 1 V Direct materials purchases Cost of direct materials available for use Less: Direct materials inventory, April 30 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during the period Less: Work in process inventory, April 30 Cost of goods manufactured Cost of finished goods available for sale Less: Finished goods inventory, April 30 EUse the preceding information to prepare a cost of goods sold budget for April. PUEBLO CERAMICS INC. Cost of Goods Sold Budget For the Month Ending April 30 Finished goods inventory, April 1 Work in process inventory, April 1 Direct materials: Direct materials inventory, April 1 - v Direct materials purchases Cost of direct materials available for use Less: Direct materials inventory, April 30 Cost of direct materials placed in production Direct labor Factory overhead Total manufacturing costs Total work in process during the period Less: Work in process inventory, April 30 Cost of goods manufactured Cost of finished goods available for sale 1000 Less: Finished goods inventory, April 30 Cost of goods sold FeedbackWeek 11: Homework (CH. 13) eBook Flexible Budget for Selling and Administrative Expenses Fuller Enterprises uses flexible budgets that are based on the following data: Sales commissions 6% of sales Advertising expense 20% of sales Customer support expense $2,000 plus 16% of sales Office salaries expense $30,000 per month Miscellaneous administrative expense $3,000 plus 5% of sales Research and development expense $10,000 per month Prepare a flexible selling and administrative expenses budget for July for sales volumes of $600,000, $800,000, and $1,000,000. (Use Exhibit 5 as a model. ) Enter all amounts as positive numbers. FULLER ENTERPRISES Flexible Selling and Administrative Expenses Budget For the Month Ending July 31 Total sales $600,000 $800,000 $1,000,000 Variable cost: Sales commissions Advertising expense Customer support expense Miscellaneous administrative expense Total variable cost 100 Fixed cost: Customer clInnArt avnance Check My Work NextResearch and development expense $10,000 per month Prepare a flexible selling and administrative expenses budget for July for sales volumes of $600,000, $800,000, and $1,000,000. (Use Exhibit 5 as a model.) Enter all amounts as positive numbers. FULLER ENTERPRISES Flexible Selling and Administrative Expenses Budget For the Month Ending July 31 Total sales $600,000 $800,000 $1,000,000 Variable cost: Sales commissions \" J $ $ $ Advertising expense V \\I Customer support expense \" J ) Miscellaneous administrative expense V V Total variable cost $ $ $ Fixed cost: Customer support expense V J $ $ $ Office salaries expense V J Miscellaneous administrative expense ' ~/ Research and development expense \" V Total fixed cost $ $ $ Total selling and administrative expenses $ $ $ Feedback V Check My Work Static Budget vs. Flexible Budget The production supervisor of the Painting Department for Whitley Company agreed to the following monthly static budget for the upcoming year: WHITLEY COMPANY Painting Department Monthly Production Budget Wages $720,000 Utilities 46,000 Depreciation 16,250 Total $782,250 The actual amount spent and the actual units produced in the first three months in the Painting Department were as follows: Amount Spent Units Produced January $600,000 37,500 February 678,000 42,500 March 712,500 45,000 The Painting Department supervisor has been very pleased with this performance, since actual expenditures have been less than the monthly budget. However, the plant manager believes that the budget should not remain fixed for every month but should "ex" or adjust to the volume of work that is produced in the Painting Department. Additional budget information for the Painting Department is as follows: Wages per hour $18.00 Utility cost per direct labor hour $1.15 Wages per hour $18.00 Utility cost per direct labor hour $1.15 Direct labor hours per unit 0.80 hrs. Planned unit production 50,000 units a. Prepare a flexible budget for the actual units produced for January, February, and March in the Painting Department. Assume depreciation is a fixed cost. Enter all amounts as positive numbers. WHITLEY COMPANY Painting Department For the Three Months Ending March 31 January February March Units of production 37,500 42,500 45,000 Wages Utilities Depreciation Total Feedback Check My Work a. For each level of production, show wages, utilities, and depreciation. Calculate the total wages by multiplying number of units produced by hours per unit, then by wages per hour. Calculate the total utilities by multiplying the total hours of production by the utility cost per hour. b. Compare the flexible budget with the actual expenditures for the first three months.Units of production 37,500 42,500 45,000 Wages Utilities Depreciation Total Feedback Check My Work a. For each level of production, show wages, utilities, and depreciation. Calculate the total wages by multiplying number of units produced by hours per unit, then by wages per hour. Calculate the total utilities by multiplying the total hours of production by the utility cost per hour. b. Compare the flexible budget with the actual expenditures for the first three months. January February March Actual cost Total flexible budget Excess of actual cost over budget What does this comparison suggest? Has the Painting Department performed better than originally thought? No Is the department spending more than expected? Yes VFlexible Budget for Assembly Department Steelcase Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it produces filing cabinets in two departments: Fabrication and Assembly. Assume the following information for the Assembly Department: Direct labor per filing cabinet 30 minutes Supervisor salaries $90,000 per month Depreciation $7,500 per month Direct labor rate $24 per hour Prepare a flexible budget for 5,000, 12,500, and 20,000 filing cabinets for the month of August, similar to Exhibit 5, assuming that inventories are not significant. Enter all amounts as positive numbers. Steelcase Inc. Assembly Department Month Ending August 31 (Assumed Data) Units of production 5,000 12,500 20,000 Variable cost: Direct labor $1 Fixed cost: Supervisor salaries $ Depreciation Total fixed cost Total department costsProfessional Fees Earned Budget Sadie & Chipper, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending March 31, 20Y6: Billable Hours Audit Department: Staff 25,000 Partners 5,000 Tax Department: Staff 37,500 Partners 8,000 ) Small Business Accounting Department: Staff 10,000 Partners 2,000 The average billing rate for staff is $180 per hour, and the average billing rate for partners is $400 per hour. Prepare a professional fees earned budget for Sadie & Chipper, CPAs, for the year ending March 31, 20Y6. SADIE & CHIPPER, CPAs Professlonal Fees Earned Budget For the Year Ending March 31, 20Y6 Billable Hours Hourly Rate Total Revenue Audit Department: :1 4:] l: awn\" [ eek 11: Homework (CH. 13) Staff 10,000 Partners 2,000 The average billing rate for staff is $180 per hour, and the average billing rate for partners is $400 per hour. Prepare a professional fees earned budget for Sadie & Chipper, CPAs, for the year ending March 31, 20Y6. SADIE & CHIPPER, CPAs Professional Fees Earned Budget For the Year Ending March 31, 20V6 Billable Hours Hourly Rate Total Revenue Audit Department: Staff Partners ) Total Tax Department: Staff Partners Total Small Business Accounting Department: BE DE U] lnuhulDMElubl lll llll llHlW Staff $ Partners Total $ Total professional fees earned '5 Professional Labor Cost Budget Sadie 8L Chipper, CPAs, offer three types of services to clients: auditing, tax, and small business accounting. Based on experience and projected growth, the following billable hours have been estimated for the year ending March 31, 20Y6: Billable Hours Audit Department: Staff 25,000 Partners 5,000 Tax Department: Staff 37,500 Partners 8,000 D Small Business Accounting Department: Staff 10,000 Partners 2,000 Assume that the average compensation per hour for staff is $36 and for partners is $300. Prepare a professional labor cost budget for Sadie & Chipper, CPAs, for the year ending March 31, 20Y6. Enter all amounts as positive numbers. SADIE & CHIPPER, CPAs Professional Labor Cost Budget For the Year Ending March 31, 20Y6 Staff Partners Total Audit Department hours I: :1 Tax Department hours C] D Audit Department: Staff 25,000 Partners 5,000 Tax Department: Staff 37,500 Partners 8,000 Small Business Accounting Department: Staff 10,000 Partners 2,000 Assume that the average compensation per hour for staff is $36 and for partners is $300. > Prepare a professional labor cost budget for Sadie & Chipper, CPAs, for the year ending March 31, 20Y6. Enter all amounts as positive numbers. SADIE & CHIPPER, CPAs Professional Labor Cost Budget For the Year Ending March 31, 20Y6 Staff Partners Total Audit Department hours Tax Department hours Small Business Accounting Department hours Total hours 4R! 9} Average compensation per hour i \"UEUDDD 4% lmaa Total professional labor cost Direct Materials Purchases Budget Your Pie Inc. has determined from is production budget the following estimated production volumes for 12" and 16" frozen pizzas for September: Units 12" Pizza Budgeted production volume 4,500 7,500 There are three direct materials used in producing the two types of pizza. The quantities of direct materials expected to be used for each pizza are as follows: 12" Pizza 16" Pizza Direct materials: Dough 0.60 lb. per unit 1.00 lb. per unit Tomato 0.30 0.45 Cheese 0.50 0.80 In addition, Your Pie Inc. has determined the following information about each material: Dough Tomato Cheese Estimated inventory, September 1 250 lbs. 125 lbs. 240 lbs. Desired inventory, September 30 300 lbs. 150 lbs. 275 lbs. Price per pound $0.60 $0.90 $1.20 Prepare September's direct materials purchases budget for Your Pie Inc. YOUR PIE INC. Direct Materials Purchases Budget a..- u... Intu. 2...\"-.. e-_--_n.-_ an Cheese 0.50 0.80 In addition, Your Pie Inc. has determined the following information about each material: Dough Tomato Cheese Estimated inventory, September 1 250 lbs. 125 lbs. 240 lbs. Desired inventory, September 30 300 lbs. 150 lbs. 275 lbs. Price per pound $0.60 $0.90 $1.20 Prepare September's direct materials purchases budget for Your Pie Inc. YOUR PIE INC. Direct Materials Purchases Budget For the Month Ending September 30 Direct Materials: Total Units required for production: 6' 3 m 3 12" pizza 16" pizza 1 Total vi Total units to be purchased 49 l E +9 Unit price $9? immututu 9 l 3 l8 Total direct materials to be purchased $ Direct Materials Purchases Budget Coca-cola Enterprises (CCE) is the largest bottler of Coca-cola in North America. The company purchases Coke and Sprite concentrate from The Coca-cola Company (KO), dilutes and mixes the concentrate with carbonated water, and then fills the blended beverage into cans or plastic two-liter bottles. Assume that the estimated production for Coke and Sprite two-liter bottles at the Dallas, Texas, bottling plant are as follows for the month of October: Coke 1,500,000 two-liter bottles Sprite 800,000 two-liter bottles In addition, assume that the concentrate costs $75 per pound for Coke and Sprite. The concentrate is used at a rate of 0.20 pound per 100 liters of carbonated water in blending Coke and at a rate of 0.15 pound per 100 liters of carbonated water in blending Sprite. Assume that two-liter bottles cost $0.04 per bottle and carbonated water costs $0.03 per liter. Prepare a direct materials purchases budget for October, assuming no changes between beginning and ending inventories for all three materials. Enter all amounts as positive numbers. COCA-COLA ENTERPRISES-DALLAS PLANT Direct Materials Purchases Budget For the Month Ending October 31 Concentrate 2-Liter Bottles Carbonated Water Materials required for production: Coke Ibs. btls. Itrs Sprite Total materials Ibs. btls. Itrs. Direct materials unit price Total direct materials to be purchased $Direct Labor Cost Budget Sea Pines Company manufactures two types of tennis rackets, the Junior and Pro Striker models. The production budget for March for the two rackets is as follows: Junior Pro Striker Production budget 9,000 units 5,000 units Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Forming Department Assembly Department Junior 0.20 hour per unit 0.60 hour per unit Pro Striker 0.35 hour per unit 0.75 hour per unit The direct labor rate for each department is as follows: > Forming Department $21 per hour Assembly Department $16 per hour Prepare the direct labor cost budget for March. Enter all amounts as positive numbers. SEA PINES COMPANY Direct Labor Cost Budget For the Month Ending March 31 Forming Department Assembly Department Total Hours required for production: Pro Striker C] S m C] C] 11 [ Junior Pro Striker Production budget 9,000 units 5,000 units Both rackets are produced in two departments, Forming and Assembly. The direct labor hours required for each racket are estimated as follows: Forming Department Assembly Department Junior 0.20 hour per unit 0.60 hour per unit Pro Striker 0.35 hour per unit 0.75 hour per unit The direct labor rate for each department is as follows: Forming Department $21 per hour Assembly Department $16 per hour D > Prepare the direct labor cost budget for March. Enter all amounts as positive numbers. SEA PINES COMPANY Direct Labor Cost Budget For the Month Ending March 31 Forming Department Assembly Department Total Hours required for production: Junior 2 C Pro Striker :] [: Total :] [: Hourly rate 3 $: Total direct labor cost $3 3: G l Production and Direct Labor Cost Budgets Levi Strauss & Co. manufactures slacks and jeans under a variety of brand names, such as Dockers and 501 Jeans. Slacks and jeans are assembled by a variety of different sewing operations. Assume that the sales budget for Dockers and 501 Jeans shows estimated sales of 60,000 and 125,000 pairs, respectively, for May. The nished goods inventory is assumed as follows: Dockers 501 Jeans May 1 estimated inventory 6,000 15,000 May 31 desired inventory 8,500 10,000 Assume the following direct labor data per 5 pairs of Dockers and 501 Jeans for four different sewing operations: Direct Labor per 5 Pairs Dockers 501 Jeans Inseam 15 minutes 10 minutes Outerseam 18 15 Pockets 6 4 Zipper 3 2 Total 42 minutes 31 minutes a. Prepare a production budget for May. LEVI STRAUSS & C0. Production Budget May (Assumed Data) Dockers (Units) 501 Jeans (Units) LEVI STRAUSS & CO. Production Budget May (Assumed Data) Dockers (Units) 501 Jeans (Units) Expected units to be sold Total units Total units to be produced b. Prepare the May direct labor cost budget for the four sewing operations, assuming a $15 wage per hour for the inseam and outerseam sewing operations and a $17 wage per hour for the pocket and zipper sewing operations. Round your answers to one decimal place, if necessary. LEVI STRAUSS & CO. Direct Labor Cost Budget May (Assumed Data) Inseam (minutes) Outerseam (minutes) Pockets (minutes) Zipper (minutes) Total Dockers 501 Jeans Total minutes Total direct labor hours Direct labor rate Total direct labor cost $Factory Overhead Cost Budget Nutty Candy Company budgeted the following costs for anticipated production for August: Advertising expenses $90,000 Production supervisor wages $62,000 Manufacturing supplies 45,000 Production control wages 18,500 Power and light 28,000 Executive officer salaries 150,000 Sales commissions 115,000 Materials management wages 22,500 Factory insurance 8,000 Factory depreciation 16,000 Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only factory fixed costs. Enter all amounts as positive numbers. NUTTY CANDY COMPANY Factory Overhead Cost Budget For the Month Ending August 31 Variable factory overhead costs: Manufacturing supplies Power and light V Production supervisor wages Production control wages Materials management wages Total variable factory overhead costs $ Fixed factory overhead costs: Factory insurance Factory depreciationManufacturing supplies 45,000 Production control wages 18,500 Power and light 28,000 Executive officer salaries 150,000 Sales commissions 115,000 Materials management wages 22,500 Factory insurance 8,000 Factory depreciation 16,000 Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only factory fixed costs. Enter all amounts as positive numbers. NUTTY CANDY COMPANY Factory Overhead Cost Budget For the Month Ending August 31 Variable factory overhead costs: Manufacturing supplies Power and light Production supervisor wages Production control wages Materials management wages Total variable factory overhead costs Fixed factory overhead costs: Factory insurance V Factory depreciation Total fixed factory overhead costs Total factory overhead costs