IL. C. Body Boards Inc. Budgeting Project As the head accountant for L. C. Body Boards...
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IL. C. Body Boards Inc. Budgeting Project As the head accountant for L. C. Body Boards Inc., you are responsible for preparing the company's master budget for the first quarter of 20XX. The administrative and divisional managers have prepared the appropriate information (found below) for you to prepare the budget. In addition to the compiled information, you will also find the budgets, reports, questions, and statements required by the CFO. Step 1 L. C. Body Boards Inc. produces Body Boards for sale at local surf shops. The company is in the process of creating a master budget for the first quarter of 20XX. L. C. Body Boards Inc. Budgeting Project Step 2 L. C. Body Boards Inc. is now preparing the budget for direct materials purchases, direct labor, and manufacturing overhead. Each unit production requires L.C. Body Boards pays 6 pounds Foam X $3.75 per pound .5-pound Plastic Z. $10 per pound. Management prefers to maintain ending raw materials inventory equal to materials 30% of needed production for the next month. Raw Material inventory on December 31 for Foam X was 385,000 pounds and for Plastic Z was 32,000 pounds. All direct materials are purchased on credit. L. C. Body Boards pays 72% of purchases in the month of purchase and 28% the following month. L. C. Body Boards pays all invoices in a timely manner and receives a 1% cash discount on all of the raw materials purchases. The accounts payable on December 31 were $1,650,000. Each unit of production requires 0.6 direct labor hours at a cost of $21.00 per hour. Variable overhead costs are: Accounting Sales results from the prior year are: Last Year Units Sold January 190,000 February 210,000 March 215,000 199,000 April May Unit Sales are to expected increase 14% above last year's sales and each unit sells for $53.00. All sales are on credit. The company expects to collect 70% of sales in the month of sale, 28% of sales in the month following the sale, 2% percent will be uncollectable (Bad Debt Debts Expense is recognized in the month of sale). The company gives credit terms of 2/EOM, n/EOM second month. Accounts receivable at the end of last year totaled $ 485,000. This represents the collectable amount of December sales that will be collected in January. Management prefers to maintain ending finished goods inventory equal to 12% of next month's sales. The Finished Goods Inventory on December 31 of the prior year was 32,500 units. REQUIRED: a) Prepare a sales and cash collections budget for L. C. Body Boards Inc. (For all budgets show amounts for January, February, March, and the total for quarter, also all budgets need to be to two decimal places) b) Prepare a production budget for L. C. Body Boards Inc. $ 0.27 per unit $ 1.20 per unit gerial Accoun Indirect materials Indirect Labor Other Fixed overhead costs per month: Salaries Rent $196,000 $18,000 Depreciation REQUIRED: $ 1.12 per unit a) Prepare two direct materials budgets, one for the Foam X and the other for the Plastic Z for L. C. Body Boards b) Prepare a single cash disbursements budget for the material purchases for L. C. Body Boards. c) Prepare a schedule showing the cost of ending inventory for raw materials as of March 31, 20xx d) Prepare a direct labor budget for L. C. Body Boards Inc. Show the cash disbursements for labor at the bottom of the budget. e) Prepare a manufacturing overhead budget for L. C. Body Boards Inc. Show cash disbursements for overhead at the bottom of the budget. Show a calculation of the per unit cost of the manufacturing overhead ROUNDED to 3 decimal places. (Note you must use the excel round function for this calculation) f) Prepare a schedule for the cost of Finished Goods Inventory as of March 31, 20xx. Budgeted production (Pounds) Raw materials needed per pound Production needs per pound Add desired ending inventory per pound Total needs (pounds) Less begin inventory of raw materials Raw Materials to be purchased Cost of raw materials Cost of raw materials to be purchased Direct Materials cost per pound Required production of product Direct Labor hours Total Direct Labor Hours needed Direct Labor cost per hour Total Direct Labor cost Direct labor cost per pound L.C body boards inc Direct Materials Budget - Foam First Quarter of year 2024 1 2 L.C Body Boards Inc. Direct Labor Budget First Quarter of year 2024 1 Quarter 3 4 Total 2 Quarter 3 4 Total IL. C. Body Boards Inc. Budgeting Project As the head accountant for L. C. Body Boards Inc., you are responsible for preparing the company's master budget for the first quarter of 20XX. The administrative and divisional managers have prepared the appropriate information (found below) for you to prepare the budget. In addition to the compiled information, you will also find the budgets, reports, questions, and statements required by the CFO. Step 1 L. C. Body Boards Inc. produces Body Boards for sale at local surf shops. The company is in the process of creating a master budget for the first quarter of 20XX. L. C. Body Boards Inc. Budgeting Project Step 2 L. C. Body Boards Inc. is now preparing the budget for direct materials purchases, direct labor, and manufacturing overhead. Each unit production requires L.C. Body Boards pays 6 pounds Foam X $3.75 per pound .5-pound Plastic Z. $10 per pound. Management prefers to maintain ending raw materials inventory equal to materials 30% of needed production for the next month. Raw Material inventory on December 31 for Foam X was 385,000 pounds and for Plastic Z was 32,000 pounds. All direct materials are purchased on credit. L. C. Body Boards pays 72% of purchases in the month of purchase and 28% the following month. L. C. Body Boards pays all invoices in a timely manner and receives a 1% cash discount on all of the raw materials purchases. The accounts payable on December 31 were $1,650,000. Each unit of production requires 0.6 direct labor hours at a cost of $21.00 per hour. Variable overhead costs are: Accounting Sales results from the prior year are: Last Year Units Sold January 190,000 February 210,000 March 215,000 199,000 April May Unit Sales are to expected increase 14% above last year's sales and each unit sells for $53.00. All sales are on credit. The company expects to collect 70% of sales in the month of sale, 28% of sales in the month following the sale, 2% percent will be uncollectable (Bad Debt Debts Expense is recognized in the month of sale). The company gives credit terms of 2/EOM, n/EOM second month. Accounts receivable at the end of last year totaled $ 485,000. This represents the collectable amount of December sales that will be collected in January. Management prefers to maintain ending finished goods inventory equal to 12% of next month's sales. The Finished Goods Inventory on December 31 of the prior year was 32,500 units. REQUIRED: a) Prepare a sales and cash collections budget for L. C. Body Boards Inc. (For all budgets show amounts for January, February, March, and the total for quarter, also all budgets need to be to two decimal places) b) Prepare a production budget for L. C. Body Boards Inc. $ 0.27 per unit $ 1.20 per unit gerial Accoun Indirect materials Indirect Labor Other Fixed overhead costs per month: Salaries Rent $196,000 $18,000 Depreciation REQUIRED: $ 1.12 per unit a) Prepare two direct materials budgets, one for the Foam X and the other for the Plastic Z for L. C. Body Boards b) Prepare a single cash disbursements budget for the material purchases for L. C. Body Boards. c) Prepare a schedule showing the cost of ending inventory for raw materials as of March 31, 20xx d) Prepare a direct labor budget for L. C. Body Boards Inc. Show the cash disbursements for labor at the bottom of the budget. e) Prepare a manufacturing overhead budget for L. C. Body Boards Inc. Show cash disbursements for overhead at the bottom of the budget. Show a calculation of the per unit cost of the manufacturing overhead ROUNDED to 3 decimal places. (Note you must use the excel round function for this calculation) f) Prepare a schedule for the cost of Finished Goods Inventory as of March 31, 20xx. Budgeted production (Pounds) Raw materials needed per pound Production needs per pound Add desired ending inventory per pound Total needs (pounds) Less begin inventory of raw materials Raw Materials to be purchased Cost of raw materials Cost of raw materials to be purchased Direct Materials cost per pound Required production of product Direct Labor hours Total Direct Labor Hours needed Direct Labor cost per hour Total Direct Labor cost Direct labor cost per pound L.C body boards inc Direct Materials Budget - Foam First Quarter of year 2024 1 2 L.C Body Boards Inc. Direct Labor Budget First Quarter of year 2024 1 Quarter 3 4 Total 2 Quarter 3 4 Total
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Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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