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Kindly answer the questions with work. Thank you During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and
Kindly answer the questions with work. Thank you
During the first calendar quarter of 2016, Clinton Corporation is planning to manufacture a new product and introduce it in two regions. Market research indicates that sales will be 8,000 units in the urban region at a unit price of $53 and 7,000 units in the rural region at $48 each. Because the sales manager expects the product to catch on, he has asked for production sufficient to generate a 6,000- unit ending inventory. The production manager has furnished the following estimates related to manufacturing costs and operating expenses: Variable Fixed (per unit) (total) Manufacturing costs: Direct materials A (4 lb. @s3.15/1lb.) $12.50 B (2 lb.$4.65/lb.) 9.30 Direct labor (0.5 hours per unit) 7.50 Manufacturing overhead S7,550 Depreciation Factory supplies Supervisory salaries 0.90 4,500 28,800 0.75 22,950 Other Operating expenses Selling Advertising 22,500 Sales salaries& commissions* 1.50 15,000 Other 0.90 3,000 Administrative: Office salaries 2,700 Supplies 0.15 1,050 0.08 1,950 Other Varies per unit sold, not per unit produced. a. Assuming that the desired ending inventories of materials A and B are 6,000 and 8,000 pounds, respectively, and that work-in-process inventories are immaterial, prepare budgets for the calendar quarter in which the new product will be introduced for each of the following operating factors: Do not use negative signs with any of your answers below. 1. Total sales 0 2. Production units 3. Material purchase cost Material A Material B Total pounds (lbs.) required for production Desired ending materials inventory Total pounds to be available Beginning materials inventory Total material to be purchased (Ibs.) Total material purchases ($) 4. Direct labor costs $ 5. Manufacturing overhead costs Fixed Variable Total Depreciation Factory supplies Supervisory salaries Other Total manufacturing overhead $ tA tA A tTA 6. Selling and administrative expenses Total Fixed Variable Selling expenses Advertising $ $ $ Sales salaries and commissions Other Total selling expenses $ Administrative expenses: Office salaries $ $ $ Supplies Other Total administrative expenses $ Total selling and administrative expenses $ b. Using data generated in requirement (a), prepare a budgeted income statement for the calendar quarter. Assume an overall effective income tax rate of 30% Round answers to the nearest whole number. Do not use negative signs with your answers. Clinton Corporation Budgeted Income Statement For the Quarter Ended March 31, 2016 Sales $ Cost of Goods Sold: Beginning Inventory-Finished Goods $ Material: Beginning Inventory - Material Material Purchases Material Available Ending Inventory - Material Direct Material Direct Labor Manufacturing Overhead Total Manufacturing Cost Cost of Goods Available for Sale Ending Inventory- Finished Goods Cost of Goods Sold Gross Profit Operating Expenses Selling Expenses Administrative Expenses Total Operating Expenses Income before Income Taxes Income Tax Expense Net Income $Step by Step Solution
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