HP Tools - - View Option - X Cior Utilities The East Division of K Company manufactures a component that is tal to the health care Industry. This Diwan has been experiencing some problems in coordinating activities between warious departments which resulted in acute and embarrassing shortages in the industry in the past. The divisions Manager in an effort to avoid future shortages has decided to reinforce the decision to have monthly budous prepared to aid in the production process To assist in preparing the second Quarter's budgets, the Financial Controller has provided the following actual and budgeted information $57.000 $3100D $16 DOD $8 DOO $112.000 January (act) February (actual) 6.000 10 DOO 14 000 April (Budget) May (budget) June budget) July (budget) August (budget) 135,000 50 000 45.000 30.000 The actual fixed inanufacturing Overhead cost incurred during the first quarter amounted to $1.1/.000. The East Division has budgeted fixed manufacturing overhead cost for the year as follows Your budget Actual for first quenter $ 872 000 $ 224 000 Property taxes 143 000 37.750 2010,000 727 300 631.000 157 750 72 000 23 000 Total fixed $4 628.000 $1,170.000 manufacturing Direct Material Two different materials are used in the production of the component Data related to these materials are given below Direct Material Units of Material Cort per unit | Inventory of per finished march 31 4 No. 210 No. 312 pounds feet $5.00 $200 46.000 pounds 69 000 fot I Finished Goods Inventory The desired ending inventory in completed components is 20% of the next months estimated sales. The Last Division has 4 000 components finished quods inventory at March 31 Material No.210 is sometimes in short supply therefore the East Dision requires enough of this material on hand to provde for 50% of the following manti's production needs. Matenal No. 312 is er get therefore only one thirds of the following month's production need is required to be kept at the end of each month Prepare the production budget foe East Division for the second quarter ending June 30 showing computations by month and in total for the quarter Direct Labour The Fast Division has three departments through which the component must past before they are completed. Information relating to direct labour in the departments is listed in the table below. Direct labour adjusted each month as qui Prepare the direct materials purchase budget in units and dollars for each type of matenal for the second quarter ending June 30 also showing computations by month and in total for the quarter Department Prepare the direct labour budget in hours and in dollars for the second quarter June 3D showing only the quarter Cost per direct labour hour Shaping Assembly Finishing Direct labour hours per component 0.25 0.70 0.10 $16.00 $20.00 Assung that the total ined cost for the year will not change from the original estimates, prepare the variable and Fixed overheard budgets for the second quarter by line item Manufacturing Overhead East Division manufactured 92.000 components during the first quarter of the current year The actual variable cost incurred in producing the components for the first quarter is given below. The financial Controller believes that the variable cost per unit will remain unchanged for the remaining in month of the year. 16 PM HP Tools - - View Option - X Cior Utilities The East Division of K Company manufactures a component that is tal to the health care Industry. This Diwan has been experiencing some problems in coordinating activities between warious departments which resulted in acute and embarrassing shortages in the industry in the past. The divisions Manager in an effort to avoid future shortages has decided to reinforce the decision to have monthly budous prepared to aid in the production process To assist in preparing the second Quarter's budgets, the Financial Controller has provided the following actual and budgeted information $57.000 $3100D $16 DOD $8 DOO $112.000 January (act) February (actual) 6.000 10 DOO 14 000 April (Budget) May (budget) June budget) July (budget) August (budget) 135,000 50 000 45.000 30.000 The actual fixed inanufacturing Overhead cost incurred during the first quarter amounted to $1.1/.000. The East Division has budgeted fixed manufacturing overhead cost for the year as follows Your budget Actual for first quenter $ 872 000 $ 224 000 Property taxes 143 000 37.750 2010,000 727 300 631.000 157 750 72 000 23 000 Total fixed $4 628.000 $1,170.000 manufacturing Direct Material Two different materials are used in the production of the component Data related to these materials are given below Direct Material Units of Material Cort per unit | Inventory of per finished march 31 4 No. 210 No. 312 pounds feet $5.00 $200 46.000 pounds 69 000 fot I Finished Goods Inventory The desired ending inventory in completed components is 20% of the next months estimated sales. The Last Division has 4 000 components finished quods inventory at March 31 Material No.210 is sometimes in short supply therefore the East Dision requires enough of this material on hand to provde for 50% of the following manti's production needs. Matenal No. 312 is er get therefore only one thirds of the following month's production need is required to be kept at the end of each month Prepare the production budget foe East Division for the second quarter ending June 30 showing computations by month and in total for the quarter Direct Labour The Fast Division has three departments through which the component must past before they are completed. Information relating to direct labour in the departments is listed in the table below. Direct labour adjusted each month as qui Prepare the direct materials purchase budget in units and dollars for each type of matenal for the second quarter ending June 30 also showing computations by month and in total for the quarter Department Prepare the direct labour budget in hours and in dollars for the second quarter June 3D showing only the quarter Cost per direct labour hour Shaping Assembly Finishing Direct labour hours per component 0.25 0.70 0.10 $16.00 $20.00 Assung that the total ined cost for the year will not change from the original estimates, prepare the variable and Fixed overheard budgets for the second quarter by line item Manufacturing Overhead East Division manufactured 92.000 components during the first quarter of the current year The actual variable cost incurred in producing the components for the first quarter is given below. The financial Controller believes that the variable cost per unit will remain unchanged for the remaining in month of the year. 16 PM