Instructions The project involves creating a sequence of budgets based on particular sales, production, and cost data. You will be asked to create a Sales Budget, Production Budget, and Budgets for Direct Materials, Direct Labor and Manufacturing Overhead as part of this project. The budgets need to be created in the correct sequence as one leads to the next. The over- arching goal of this exercise is to see the value of the budgeting process. Using the assumptions presented, use this excel template e' to prepare the following schedules (showing quarterly and annual amounts where applicable): a. Sales Budget b. Production Budget c. Direct Materials Purchases Budget d. Direct Labor Budget e. Manufacturing Overhead Budget Turn in your completed project with a simple cover page that includes your name. Please include each of the above listed schedules on a separate page in the order listed. Look to my lecture slides and the textbook for examples of how to lay out each of the schedules listed above. Your schedules don't have to look exactly like them, but should communicate the same information. Be sure to properly label and describe all information in your schedules as if you were going to present the budget to a group of senior management. .com courses/1290586/assignments/8947295?module item id = 15355964 The 2016 quarterly unit sales estimates and projected sales prices per unit areas follows: Quarter 4 Quarter 1 9,200 $90 Quarter 2 9,300 Quarter 3 9,500 Sales units 9,400 $90 $90 $90 Price per unit Also, note that that projected sales (and projected production) for Quarter 1 of 2017 is 10,000 units. Product Cost Assumptions The company's product requires two raw materials, resistors and switches. Cost parameters are as follows: Number of Components/Unit Switches @ $4/switch Resistors @ $8/switch 3 2 Number of minutes required to complete finished unit Direct labor minutes per unit Machine minutes per unit 30 12 Hour rates used Direct labor rate= $10/hour Manufacturing overhead rates (i.e., the POHRs to use to apply overhead) Labor-related=$25/hour Machine-related= $40/hour Eastern applies manufacturing overhead using two cost drivers: direct-labor hours and machine hours. Ending Inventories The desired ending inventories for each of the two direct materials is 10% of the next quarter's respective amount of direct materials needed for production. The desired finished goods ending inventory is 5% of the next quarter's budgeted sales units. Beginning inventory for direct materials and finished goods are assumed to be zero as of 1/1/2016. This is an individual assignment. Sharing of work product or discussion of your results with other students (current, past or future) is a violation of the Academic Honesty Code and will be reported to the Academic Honesty Committee. B
