Question
,Inc., manufactures and sells snowboards. SkisSkis manufactures a single model, the Pipex. In late 20172017, SkisSkis's management accountant gathered the following data to prepare budgets
,Inc., manufactures and sells snowboards. SkisSkis manufactures a single model, the Pipex. In late 20172017, SkisSkis's management accountant gathered the following data to prepare budgets for January
20182018:
...
(Click the icon to view the direct materials inventories)
LOADING...
(Click the icon to view the additional information.)
Other data include:
LOADING..(Click the icon to view the other data.)The inventoriable unit cost for ending finished goods inventory on December 31,
20172017,
is
$300.00300.00.
Assume
SkisSkis
uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations.Read the requirements
LOADING...
.
| Materials and Labor Requirements | ||
| Direct materials | ||
| Wood | 12 | board feet (b.f.) per snowboard |
| Fiberglass | 10 | yards per snowboard |
| Direct manufacturing labor | 6 | hours per snowboard
|
Direct Materials Inventories Beginning Inventory 1/1/2018 Ending Inventory 1/31/2018
Wood 2,050 b.f. 1,550 b.f. Fiberglass 1,050 yards 2,050 yards
|
| 2017 Unit Price | 2018 Unit Price | ||
| Wood | $33.00 | per b.f. | $35.00 | per b.f. |
| Fiberglass | $9.00 | per yard | $10.00 | per yard |
| Direct manufacturing labor | $29.00 | per hour | $30.00 | per hour |
| 1. | Prepare the January 20182018 revenues budget (in dollars). |
| 2. | Prepare the January 20182018 production budget (in units). |
| 3. | Prepare the direct material usage and purchases budgets for January 20182018. |
| 4. | Prepare a direct manufacturing labor costs budget for January 20182018. |
| 5. | Prepare a manufacturing overhead costs budget for January 20182018. |
| 6. | What is the budgeted manufacturing overhead rate for January 20182018? |
| 7. | What is the budgeted manufacturing overhead cost per output unit in January 20182018? |
| 8. | Calculate the cost of a snowboard manufactured in January 20182018. |
| 9. | Prepare an ending inventory budget for both direct materials and finished goods for January 20182018. |
| 10. | Prepare a cost of goods sold budget for January 20182018. |
| 11. | Prepare the budgeted income statement for SkisSkis, Inc., for January20182018. |
| 12. | What questions might the CEO ask the management team when reviewing the budget? Should the CEO set stretch targets? Explain briefly. |
| 13. | How does preparing the budget help SkisSkis's management team better manage the company? |
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