In this project you will apply the techniques and principles of budgeting and standard costs to the operations of Speedway Toys, Inc. You will prepare budgets for the year ended December $31,20xx,$ determine standards costs per hour and per unit of product, and compute variances for the month of January $20xx.$

Company's Operations

Speedway Toys, Inc., manufactures a battery$-$powered toy car that is sold in toy stores and department stores. In the firm's manufacturing process, highly skilled employees operate molding machines that form semi$-$liquid plastic into car bodies. Assembly personnel insert a battery driven motor assembly, which the firm purchases from a subcontractor, into the molded car body. Then the assembly personnel add wheels and axles $($also purchased from a subcontract$)$ and decorative trim to complete the car.

Preparation Budgets

SALES BUDGET

The sales manager and her staff have analyzed sales records and other data and forecast that $61,000$ cars will be sold in $20$XX$.$ Standard costs are to be based on this volume of production, which should require $30,000$ direct labor hours.

PRODUCTION BUDGET

Speedway Toys, Inc., expects to begin $20$XX with an inventory of $7,000$ completed toy cars. The company would like to reduce its finished goods inventory of toy cars at the end of $20xx$ by $1,000$ cars to $6,000$ cars.

STANDARDS FOR DIRECT MATERIALS AND DIRECT LABOR

Speedway Toys, Inc., has established the following standards for direct materials and direct labor, which should be attainable under normal circumstances. Later you will be instructed to compute the standard cost per hour of direct labor and per unit of product. Data related to direct materials follow:

yOU need to edit. it's safer to stay in Protected View Enable EditingIn this project you wnill apply the techniques and peinciples of tudgeting and standard costs to theoperations of Speedway Teys, Ic$,$ Yo wvill prepare tudgets for the year ended December S$1,20$XX$,$ determine standards cots per hour and per unit of product, and compite variances for thmonth of January $20$NXCompany's OperationsSpeedway Toys, Inc, mamufactures a battery powered toy car that is sold in toy stores anddepartment stores. In the firm's m$$mufacturinge process, highly skilled employees operateto car oouies. Assembly personnel itisert ahatery dcar bedy Then the assembly personnel add wheels amd axles $($also pucheand decorative trim to complete the canPreparation BudgetsSALES BUDGETThe sales manager and her staff have anatyzed sales records and otheBudgeting and Standard Costs$61,000$ cars will be sold in $20$XX Standard costs are to be bascd on this unlme af nrodtionwhich shouid require $30,000$irect labor hoursPRODUCTION BUDGETt eys, in$,$ expects to begm XX with am invetory of $7,000$ completed toy cars. Thereduce Its fimished goods nventory of toy cars at thec end of $20$XX by$1,000$ cars to $6,000$ cars,STANDARDS FOR DIRECT MATERIALS AND DIRECTLABORSpeedway Toys, Iac, has established the following standards for duect materials and directao, Wauch should be attainable under normal cacumstances. Later you will be instructed tetilor dect labor and per uait of podact, Data $($ulated to dirertSTANDARD COST ACCOUNTING PRO$0$CEDUREs TOBE COMPLETEDDuring January $20$XX$,$ Speedway Toys, Inc., mamufacturod $4,800$ toy cats The costs ofmaterials labot, and overhead were as follows:MatenalMotorsWheels and asjesDirest IaborMoldersAssembiersOverhead$|$VariabiFixedAmount$|2050$ Ib at S$3,60$ per libmotors at S$624$ pert$4,880$ sets at $$\mathrm{.}425$ per setHours$030$ hr$1$s$10$ hr$1$Amount$$13\mathrm{.}120$Galaxy S$22$$$12\mathrm{.}050$B$-1$ Prepare a summary of materials costs.B$2$ Prepare a sunmary of labor cUstsYou are to prepare the following for the month of January $20$XXX For all variances conputed,show whether they are favorable or unfavorable.actB$-3$ Compute the quantiry and price variances for each materialRatB$4$ Compuie thc etficicacy and rate variance for each type of laboS$1520$ per bourSI$8\mathrm{.}40$ per hourChareethe rax materialsB$-5$ Compute the total manufacturing overbead variance Analy ze the $($otal overhead variance.using the thaee$-$varjance analysis raethodCharue the lleeB$6$ Prepare entries in genieral jounal fom to record each of the ollowng $($omit explanations$)$od the uteruls vaances.dc$.$Charge the manufactuing ovecbesd to prodscon and recoru te oyehead variamces.d$.$ Transfer the completed units to finished goods.Cortholbe CststiahorD eirINSTRUCTIONSenbirMATERIALS BIDGErGalaxy S$2215$bprkMANEACTURING OVERHEAB BDGETMANAGERIAL IDECISIONSGalaxy S$2260$ perFrom be tal pete e jep e te sik ntitr er$,$ er te ideaBUDGETING PROCEDURED TO BE COMPLETEDn adgrt $($lacale ca