Learn La mutures and seis on producto naces for a wh two more, the tonic made an in un model the company and is part od vear of tot by preparing from its matter The company is trying to dede how many to mastecture, how much it on drett mat address, and what the tutory rested in budoing for wing and adve, in creating budgeted me lemn diction of twee You been asked to the controller team in preparing the 2012 budgets Sales Budget The sales budget often used the prior year's e as a station, and then we were to varaus factors such and in and motion, entering changes and industry and general economic conditions. Learnos complements prior year's sales and has prepared the following budget Alter reviewing team's a budget, v note that the numbers have been the company.com has told you the tid for the cand med en the missing amounts Learnce Sales Budget For the Year Ending December 31, 2012 Unit Sales Unit Selling Total Product Volume Price Sales Has Abacus 58 $28.000 Deluxe Abacus 432.000 5720,000 72.000 Tota det budget estimates the number of units to be mad Fon sunget The other thould be integrated with the sales budget to nure that production and sales recept in balansuring the year. The production to stimate the numberints to return met budgeted sales and desire tentory level You note that ano asumitedxtures from the following pentinuiet and enten amuntYou may need to unders from the sale budet you or Learco Production Budget For the Year Ending December 31, 2013 Units Basic Unit Deluxe Expected units to be (homas Budget) Desired dig inventory. December 31, 2012 1.000 3,000 Total units available (1.050) (2.100) Estimated beginning inventory, January 1, 2012 Total units to be oroduced Direct Materials Purchases Budget The resulterte with the production budget to ensure that production is not the Before you make any changes to the budget your the worn on the flowing Direct Data Tables enter the buted to the hos Budget Archer purchases budget (which folios the Direct Data Table you see that are some Queberom the voget. Fa mes may and the Direct Materials Data Tak, or from the sales budget and production but you are When cround your states Direct Materials Data Table Wood Pieces Beads Paciones required per tabacus 1 De abaca 2 3 Cost per package Woods 50.20 Beads 30 20 to be procedem Production Budget): a abacus E Dabacus Learnca Learnca Direct Materials Purchases Budget For the Year Ending December 31, 2012 Direct Materials Wood Pieces Beads Packages regured for production Total 2,200 5.000 Deluxe alia Desired intory, December 31, 2012 Total packages avasti Estimated wventory, anuary 1, 2012 Total packages to be purchased Unit price per padcage) Total direct materials to be purchased DO'O'D (3,500) (4.500) 558,310 Direct Labor Cost Budget Dettabor needs from the corectator.com cor show.coordinated between the production and personalment so that there will be enough short for Brion Before you make any changes to the budget, you wiw the information on the flowing Directoratele andere to be produced from the dish out the wat Budo (which follows the Died Labor Data Table). You coure that encomitted out a few understrom the site in the many sourou may retos runter from the rest har turta Table, or from the sales budget, protution budget and direct materials purchases budget you prepared. When required, round your answers to the name dolari Direct Labor Data Table Gluing Assembly Hours required Basic abacus 0.50 0.10 Deluxe abacus 0.10 0.20 Labor hourly rate Ging 311 Assembly 518 Units to be produced from Production Budget) Basic abacus Deluxe abacus Learnce Learnco Direct Labor Cost Budget For the Year Ending December 31, 2012 Gluing Assembly Hours required for production Total Basic abacus Deluxe abrace Total Hourly rate Total direct labor cost $297,685 Factory Overhead Cost Budget The later het cost budget should be integrated with the production budget to ensure that production is not interrupted during the year. This budget may be oported by dear wheth pormally separate factory overhead costs into fixed and variable costs so that department managers muy monitor and evaluate costs during the year for simplicity. Co has not waste time After reviewing the following factory overhead cost budget, you note that Leamco has completed the budget with the exception of an amount in the mount Learnco Factory Overhead Cost Budget For the Year Ending December 31, 2012 Indirect factory wages $5,400 Power and light Depreciation of plant and equipment 1,450 Total factory overhead cost $18,100 Cost of Goods Sold Budget The integrates the direct material purchases budinct labor cost but, and factory overhead cost estimated and strenantes rectant finished goods mait be integrated into the cost of goods sold budget Compite the pain of the cost of goods sold trudget for teamca, information that follows provided by the corner, and sing the ones you have Learnce Cost of Goods Sold Budget For the Year Ending December 2012 Pinhedos hory, anuary 1, 2012 10,020 Work in procesory, January 1, 2017 $2,010 Direct materia Diret materials tary, January , 2012 31.600 Direct materials the Cout of direct material walable for Direct materia inventary, December 31, 2013 (1.4) Cost of direct materiais placed in production Direct labor 100,00 Factory ovated 1.250) Total manufacturing costs Total work incess during period Work in process inventory, December 31, 2082 Cost of goods manufactured Cost of finished goods available for sale II 11.250 Work in process Investory, December 31, 2012 Cost of good manufactured Cost of Ministed on available for sale Fire and inventory, December 31, 2012 Cast of goods sold 10:00 C.00 Selling/Admin. Expenses Budget The sales budget is often used as the point for the selliste en doet. For example, a budgetinere in sales mangeuses. Lahat wling and administrative expenses budgets. This book is marwy reviewed by you for use on the bugeted income statement Learne Selling and Administrative Expenses Budget For the Year Ending December 31, 2012 Selling expenses Sales sales expert $65.000 Advertising expense 15,000 Travel expense 5.400 Total ceiling 165.400 Administrative experts officers salaries ponte 35,000 Orice sans expense 35,000 amcerent expense Office supplies experts 6.400 Miscellaneous administrative expenses 1.600 Total administrative expenses 154,000 Total selling and adminstrative expenses 5219,400 Budgeted Income Statement The budgeted income statement is prepared by gracing the sales budgetcost of goods sold budget and selling and administrative expenses tutosteriormation that may be repult preparing the budgeted Income statement are on the following that Income Statement Data Table Budgeted Income Statement The budgeted income tant is prepared by iting the budget of you and sing and strative expert Dort sinable the budgeted come statement are on the following Budget Income Statement Data Table Review the Budjetet Income Statement Data Table, the complete the budgeted come statement that follows the table under computed amount for contact the nearest w dotar Budgeted Income Statement Data Table Interest revenue for the year $2,000 Interest expense for the year $1,500 Leanco's income tax rate 404 Learn Budgeted Income Statement For the Year Ending December 31, 2012 Neverom sales Cost of gods sold Cross profit Culing and administrative pense Selling expenses Administrative expenses Total selling and administrative expenses Operating income Other revenue and expense Interest revenue 10 10 DJ I Interest expende Income Decor Income Tax Net Income Final Questions Nadgeting affects the planning, directing, and controlling functions of management. Lamco wishes to determine the sensitivity of some of its budget values to changes ist Using the information on the completed budgets, answer the following questions conuder each cuestion separately, assuming that will the statements the same. Including the level of production of the model 1. Lamco believes that sales or the Deluxe Abacus model may decrease in 2012. It Deluxe abacus soles are zero, what will be the effect on tanto income before income tax for motore any chann in Cost of Goods Sold. a. Il teamco se s ro Deluwe Abacus units in 2012, it will break even the company will have rere income before income tax) D. LeamCo will have a net loss before income tax if it sell yero Deluxe Abacus units in 2012 Learco wist have positive income before income tax if it sels zero Deluxe Abacus units in 2012 2. Learco's vender for bead packages is expected to double its price per package of beads. If this occurs what will be the effect on Leamco's income before income tax 2. If the price for bead packages doubles, LeamCo will break even the company will have zero income before income tax) b. LearnCo wat have a loss before income taxit the price for bead packages doubles C. Lernco will still have positive income before income tax if the price for bead packages doubles changes in minimum wage in its state. If this occurs, what will be the effect 3. Learnos aware that its labor prices for the Gluing part of the manufacturing process may increase to $15.00 per hour du 4. Lancas controller Deler that the commandeses selleges by 10. and open by 25 come before income tax com plenty to the nearest