Question
Here is the data for Breakers, Inc. for the year 2019 Kindly answer 3,4 & 5 1. SALES BUDGET Breakers, Inc. is preparing budgets for
Here is the data for Breakers, Inc. for the year 2019
Kindly answer 3,4 & 5
1. SALES BUDGET
Breakers, Inc. is preparing budgets for the quarter ending June 30. Budgeted sales for
the next five months are:
-April 21,000 units
-May 51,000 units
-June 31,000 units
-July 26,000 units
-August 17,000 units
The selling price is $12 per unit.
2. PRODUCTION BUDGET
The management of Breakers, Inc. wants ending inventory to be equal to 21% of the
following months budgeted sales in units. On March 31, 5,000 units were on hand.
3. DIRECT MATERIAL BUDGET
At Breakers, six pounds of material are required per unit of product. Management wants
materials on hand at the end of each month equal to 11% of the following months
production. On March 31, 12,000 pounds of material are on hand. Material cost $.50 per
pound.
4. DIRECT LABOR BUDGET
At Breakers, each unit of product requires 0.1 hours of direct labor. The Company has a
no layoff policy so all employees will be paid for 40 hours of work each week. In
exchange for the no layoff policy, workers agreed to a wage rate of $9 per hour
regardless of the hours worked (No overtime pay). For the next three months, the direct
labour workforce will be paid for a minimum of 3,000 hours per month.
5. OVERHEAD BUDGET
QUARTER Indirect Labor Indirect materials Utilities Rent Insurance Maintenance APRIL 18,000 35% of DL 4,200 13,300 3,800 8,200 MAY 24,500 38% of DL 7,400 13,300 3,800 9,400 JUNE 19,900 39% of DL 3,200 13,300 3,800 9,200Step by Step Solution
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