i just need the answer to part e please.
Search this book Read Study the vice president's estimate of quarterly sales? What effect might this have on the company? 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead. Sports Bars, Inc., produces energy bars and sells them by the case (1 unit = 1 case). Information to be used for the operating budget this coming year follows: Average sales price for each case is estimated to be $25. Unit sales for this coming year, ending December 31, are expected to be as follows: First quarter 80,000 Second quarter 84,000 Third quarter 88,000 Fourth quarter 97,000 Finished goods inventory is maintained at a level equal to 15 percent of the next quarter's sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 13,000 units. Each unit of product requires 5 pounds of direct materials, at a cost of $3 per pound. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 43,000 pounds. Each unit of product requires 0.10 direct labor hours at a cost of $14 per hour. Variable manufacturing overhead costs are Indirect materials $0.20 per unit Indirect labor $0.15 per unit Other $0.10 per unit Fixed manufacturing overhead costs per quarter are Salaries $80,000 Other $70,000 Depreciation $55,625 Required: a. Prepare a sales budget using the format shown in Figure 9.3. Required: a. Prepare a sales budget using the format shown in Figure 9.3. b. Prepare a production budget using the format shown in Figure 9.4. c. Prepare a direct materials purchases budget using the format shown in Figure 9.5. d. Prepare a direct labor budget using the format shown in Figure 9.6. e. Prepare a manufacturing overhead budget using the format shown in Figure 9.7. Round to the nearest dollar. f. As the production manager, what Concerns, if any, do you have about production requirements for each of the four quarters? Figure 9.7 Manufacturing Overhead Budget for Jerry's Ice Cream *From Figure 9.4. **$1.20 = $240,480 total overhead cost + 200,400 units to be produced for the year. Deduct depreciation to get the actual cash payment for overhead. This information is needed for the cash budget presented in Figure 9.11. Jerry's Ice Cream Manufacturing Overhead Budget Year Ending December 31 Quarter Year Units to be produced 40.800 49.200 59,200 51,200 200,400 Variable overhead costs Indirect materials (50.15 per unit) Indirect labor150.10 per unit) Other (50.25 per unit) Total variable overhead costs $ 6,120 4,080 10,200 520,400 $ 7,380 4.920 12.300 $ 24,600 $ 8,880 5.920 14,800 $ 7,680 5.120 12,800 $ 257600 5 30.060 20,040 50,100 $100,200 Pored overhead costs Salaries Rent Depreciation Total fued overhead costs 15,000 10,000 10.070 535,070 15,000 10,000 10,070 $ 35,070 15.000 10.000 10.070 535070 15,000 10,000 10.070 35,070 60,000 40.000 40,280 $140,280 Total overhead costs Deduct depreciation Cash payments for overhead Manufacturing overhead per unit 55.470 (10.070 5 45.400 59,670 (10,070) $ 49,600 64,670 (10,070) 60,670 (10,070) $ 150 000 240480 140 2002 $200 200 1.20 e. Year LEMS (continued) Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead (continued) Manufacturing overhead budget Sports Bars, Inc. Manufacturing Overhead Budget Year Ending December 31 Quarter 2 3 Units to be produced (from production budget) Variable overhead costs: Indirect materials per unit) Indirect labor Other Total variable overhead costs Fixed overhead costs: Salaries Other Depreciation Total fixed overhead costs Total overhead costs $248,578 Deduct depreciation Cash payments for overhead Manufacturing overhead per unit per unit) per unit) ||||| $2.80
