Question
Jones Corporation has the following budgeted sales for the selected four-month period: Month Unit Sales July 20,000 August 35,000 September 25,000 October 30,000 Sales price
Jones Corporation has the following budgeted sales for the selected four-month period:
Month | Unit Sales |
July | 20,000 |
August | 35,000 |
September | 25,000 |
October | 30,000 |
| Sales price per unit is $180 |
| Plans are to have an inventory of finished product equal to 20% of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st. |
| Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30% of the needs for the next month. |
| Desired ending inventory for September is 25,200 pounds of material. Beginning inventory for July was 20,700 pounds of material. |
| Each unit requires 0.6 hours of direct labor and the average wage rate is $16 per hour. |
| Variable overhead rate is $3.50 per direct labor hour. There is also fixed overhead of $22,000 per month. |
| The company pays a 3% commission on sales. |
| Company has fixed selling and administrative expenses as follows: Rent $6,000/month Utilities $1,200/month Advertising $400/month Office Salaries $35,000/month |
Required:
A. | Prepare a sales budget for July, August, and September and in total for the quarter. |
B. | Prepare production budgets for July, August, and September and in total for the quarter. |
C. | Prepare a direct materials purchases budget in pounds and dollars for July, August, and September and in total for the quarter. |
D. | Prepare a direct labor budget in hours and total cost for July, August and September and in total for the quarter. |
E. | Prepare an overhead budget for July, August and September and in total for the quarter. |
F. | Prepare a selling and administrative expenses budget for July, August and September and in total for the quarter. |
G. | Prepare an ending finished goods inventory budget for the quarter (Hint: You have already calculated the desired ending finished goods inventory amount. Assume a stable per unit rate and round the per unit fixed factory overhead rate to two decimal places.) |
H. | Prepare a cost of goods sold budget for the quarter |
I. | Prepare a budged income statement for the quarter-the company falls into the 35% tax bracket for income taxes. |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started