Learn Co LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 2012 budgets. Sales Budget The sales budget often uses the prior year's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearnCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. LearnCo Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Unit Selling Product Volume Price Total Sales Basic Abacus 36,000 $6 $216,000 Deluxe Abacus 36,000 14 504,000 Totals 72,000 $720,000 Feedback Check My Work Review the preparation of the sales budget and use the information the controller provided. Production Budget The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels. You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared. LearnCo Production Budget For the Year Ending December 31, 2012 LearnCo Production Budget For the Year Ending December 31, 2012 Units Basic Units Deluxe Expected units to be sold (from Sales Budget) 36,000 36,000 Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available 37,000 39,000 Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units to be produced 35,950 36,900 Feedback Check My Work Be sure to include the expected units to be sold for each model from the Sales Budget. Then review the preparation of the production budget and how the amounts are computed. Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year. Before you make any changes to the budget, you review the information on the following Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 1 2 Deluxe abacus 2 3 Cost per package: $0.25 Wood pieces Beads $0.25 Units to be produced (from Production Budget): Basic abacus Deluxe abacus Toarno Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year. Before you make any changes to the budget, you review the information on the following Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 1 2 Deluxe abacus 2. 3 Cost per package: Wood pieces $0.25 Beads $0.25 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 2012 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus Deluxe abacus Desired inventory, December 31, 20Y2 2,200 5,000 Total packages available Estimated inventory, January 1, 20Y2 Total packages to be purchased (3,500) (4,500) Unit price (per package) X $ Total direct materials to be purchased $72,888 Direct Labor Cost Budget Direct labor needs from the direct labor cost budget should be coordinated between the production and personnel departments so that there will be enough labor available for production. Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Labor Data Table, or from the sales budget, production budget, and direct materials purchases budget you prepared. When required, round your answers to the nearest dollar Direct Labor Data Table Gluing Assembly Hours required per unit: Basic abacus 0.10 0.10 Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $11 Assembly $17 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Labor Cost Budget For the Year Ending December 31, 2012 Gluing Assembly Total Hours required for production: Basic abacus Deluxe abacus ULT n Total Hourly rate X $ Total direct labor cost $266,710 Learn Co LearnCo manufactures and sells one product, an abacus for classroom use, with two models, the Basic model and the Deluxe model. The company began operations on January 1, 20Y1, and is planning for 20Y2, its second year of operations, by preparing budgets from its master budget. The company is trying to decide how many units to manufacture, how much it might spend on direct materials and direct labor, and what their factory overhead expenses might be. In addition, the company is interested in budgeting for selling and administrative costs, and in creating a budgeted income statement showing a prediction of net income for 20Y2. You have been asked to assist the controller of LearnCo in preparing the 2012 budgets. Sales Budget The sales budget often uses the prior year's sales as a starting point, and then sales quantities are revised for various factors such as planned advertising and promotion, projected pricing changes, and expected industry and general economic conditions. LearnCo has completed reviewing its prior year's sales and has prepared the following sales budget. After reviewing LearnCo's sales budget, you note that three numbers have been omitted. The company's controller has told you that the units sold for the Basic and Deluxe models are expected to be the same. Fill in the missing amounts. LearnCo Sales Budget For the Year Ending December 31, 20Y2 Unit Sales Unit Selling Product Volume Price Total Sales Basic Abacus 36,000 $6 $216,000 Deluxe Abacus 36,000 14 504,000 Totals 72,000 $720,000 Feedback Check My Work Review the preparation of the sales budget and use the information the controller provided. Production Budget The production budget should be integrated with the sales budget to ensure that production and sales are kept in balance during the year. The production budget estimates the number of units to be manufactured to meet budgeted sales and desired inventory levels. You note that LearnCo has omitted six numbers from the following production budget and fill in the missing amounts. You may need to use numbers from the sales budget you prepared. LearnCo Production Budget For the Year Ending December 31, 2012 LearnCo Production Budget For the Year Ending December 31, 2012 Units Basic Units Deluxe Expected units to be sold (from Sales Budget) 36,000 36,000 Desired ending inventory, December 31, 20Y2 1,000 3,000 Total units available 37,000 39,000 Estimated beginning inventory, January 1, 20Y2 (1,050) (2,100) Total units to be produced 35,950 36,900 Feedback Check My Work Be sure to include the expected units to be sold for each model from the Sales Budget. Then review the preparation of the production budget and how the amounts are computed. Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year. Before you make any changes to the budget, you review the information on the following Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 1 2 Deluxe abacus 2 3 Cost per package: $0.25 Wood pieces Beads $0.25 Units to be produced (from Production Budget): Basic abacus Deluxe abacus Toarno Direct Materials Purchases Budget The direct materials purchases budget should be integrated with the production budget to ensure that production is not interrupted during the year. Before you make any changes to the budget, you review the information on the following Direct Materials Data Table and enter the units to be produced from the Production Budget. After scanning the direct materials purchases budget (which follows the Direct Materials Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Materials Data Table, or from the sales budget and production budget you prepared. When required, round your answers to the nearest dollar. Direct Materials Data Table Wood Pieces Beads Packages required per unit: Basic abacus 1 2 Deluxe abacus 2. 3 Cost per package: Wood pieces $0.25 Beads $0.25 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Materials Purchases Budget For the Year Ending December 31, 2012 Direct Materials Wood Pieces Beads Total Packages required for production: Basic abacus Deluxe abacus Desired inventory, December 31, 20Y2 2,200 5,000 Total packages available Estimated inventory, January 1, 20Y2 Total packages to be purchased (3,500) (4,500) Unit price (per package) X $ Total direct materials to be purchased $72,888 Direct Labor Cost Budget Direct labor needs from the direct labor cost budget should be coordinated between the production and personnel departments so that there will be enough labor available for production. Before you make any changes to the budget, you review the information on the following Direct Labor Data Table and enter the units to be produced from the Production Budget. After scanning the Direct Labor Cost Budget (which follows the Direct Labor Data Table), you observe that LearnCo has omitted quite a few numbers from the budget. Fill in the missing amounts. You may need to use numbers from the Direct Labor Data Table, or from the sales budget, production budget, and direct materials purchases budget you prepared. When required, round your answers to the nearest dollar Direct Labor Data Table Gluing Assembly Hours required per unit: Basic abacus 0.10 0.10 Deluxe abacus 0.10 0.20 Labor hourly rate: Gluing $11 Assembly $17 Units to be produced (from Production Budget): Basic abacus Deluxe abacus LearnCo Direct Labor Cost Budget For the Year Ending December 31, 2012 Gluing Assembly Total Hours required for production: Basic abacus Deluxe abacus ULT n Total Hourly rate X $ Total direct labor cost $266,710