Question
Jordan INC manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow: Variable: Selling and administrative=$5 per unit
Jordan INC manufactures a product with a selling price of $50 per unit. Units and monthly cost data follow:
Variable:
Selling and administrative=$5 per unit sold
Direct materials=10 per unit manufactured
Direct labor=10 per unit manufactured
Variable manufacturing overhead=5 per unit manufactured
Fixed: Selling and administrative=$20,000 per month
Manufacturing (including depreciation of $10,000)=30,000 per month
Jordan pays all bills in the month incurred. All sales are on account with 50 percent collected the month of sale and the balance collected the following month. There are no sales discounts or bad debts. Jordan desires to maintain an ending finished goods inventory equal to 20 percent of the following month's sales and a raw materials inventory equal to 10 percent of the following month's production. January 1, 2019, inventories are in line with these policies. Actual unit sales for December and budgeted unit sales for January, February, and March of 2019 are as follows:
JORDAN INCORPORATED: Sales Budget For the Months of January, February, and March 2019
Month
December- Sales - Units- 5,250
January- Sales - Units- 6,000
February- Sales - Units-9,000
March- Sales - Units-9,000
Dec-Sales - Dollars-$262,500
Jan-Sales - Dollars-$300,000
Feb-Sales - Dollars-$450,000
Mar-Sales - Dollars-$450,000
Additional information:
- The January 1 beginning cash is projected as $3,000.
- For the purpose of operational budgeting, units in the January 1 inventory of finished goods are valued at variable manufacturing cost.
- Each unit of finished product requires one unit of raw materials.
- Jordan intends to pay a cash dividend of $7,000 in January.
NOTE: For the entire problem - do not use any negative signs with your answers unless appropriate for net income(loss) or ending balance.
JORDAN INCORPORATED
Budgeted Contribution Income Statement
For the Month of January 2019
Sales Answer
Less variable costs:
Cost of goods sold Answer
Selling and administrative Answer Answer
Contribution Answer
Less fixed costs:
Manufacturing overhead Answer
Selling and administrative Answer Answer
Net income Answer
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