Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Managerial Accounting 201 HW 8 Prepare the Budgeted Statement of Cost of Goods Sold for October 2020. Prepare the Budgeted Income Statement for October 2020

Managerial Accounting 201

HW 8

  1. Prepare the Budgeted Statement of Cost of Goods Sold for October 2020.
  2. Prepare the Budgeted Income Statement for October 2020
  3. Prepare the Cash Budget for October 2020.
  4. Prepare a budgeted balance sheet for October 31, 2020 by calculating the October 31, 2020 balances in (a) cash (b) accounts receivable (c) inventory (d) accounts payable and (e) plugging in the balance for stockholders equity.

Rainy Day, Inc. manufactures and sells fishing boats. In September 2020, Rainy Days controller gathered the following data to prepare the October 2020 budget.

Estimated Direct Materials needed is 11 feet of fiberglass per boat and 12 yards of sheetmetal per boat

Estimated Direct manufacturing labor required is 5 hours per boat

Rainy Days Controller expects to sell 3,400 boats during October 2020 at an estimated retail price of $650 per boat. Further, the Controller expects October 2020 beginning inventory of 600 boats and would like to end October 2020 with 300 boats in stock.

The beginning fiberglass inventory on October 1, 2020 is expected to be 1,540 feet. and the ending balance is expected to be 2,040 feet. The September unit cost was $34.00 per foot and the October unit cost is projected to be $32.00 per foot.

The beginning sheetmetal inventory on October 1, 2020 is expected to be 2,040 yards and the ending balance is expected to be 1,040 yards. The September unit cost was $9 per yard and the October cost is expected to be $8 per yard.

Labor costs are $29 per hour in September and are expected to be $28 in October.

Variable manufacturing overheard is $8 per direct manufacturing labor hour. Fixed manufacturing overhead costs budgeted for October 2020 are Labor $20,000, Maintenance, $25,000, Insurance $22,000 and property taxes of $18,000.. Rainy Days variable manufacturing overhead rate is based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $220 per sales visit. The marketing plan calls for 40 sales visits during October 2020.

Finally, fixed marketing costs budgeted for October 2020 are $4,000 for sales salaries and $6,000 in advertising. Administrative costs are expected to be $10,000 for administrative salaries, $3,000 for Legal and Accounting staff, $5,000 for data processing costs and $7,000 for depreciation.

Finished-goods inventory on September 30, 2020 is valued $365.00 per unit. Assume Rainy Days uses a weighted-average inventory method for both direct materials and finished goods. Ignore work in process in your calculations.

Budgeted Balance Sheet balances as of September 30, 2020 are as follows:

Cash -

Accounts Receivable -

Inventory -

Property, plant and equipment (net) $1,175,600

Accounts Payable -

Long-term liabilities $182,000

Stockholders equity -

Selected budget information for September 2020 follows:

Cash balance, September 30, 2020 $124,000

Budgeted sales $1,650,000

Budgeted materials purchases $820,000

Customer invoices are payable within 30 days. From past experience, Rainy Dayss accountant projects 40% of invoices will be collected in the month invoiced, and 60% will be collected in the following month.

Accounts payable relates only to the purchase of direct materials. Direct materials are purchased on credit with 50% of direct materials purchases paid during the month of the purchase, and 50% paid in the month following purchases.

Fixed manufacturing overhead costs include $64,000 of depreciation costs and fixed nonmanufacturing costs include $10,000 of depreciation costs. Direct manufacturing labor and the remaining manufacturing and nonmanufacturing overhead costs are paid monthly.

There was not any property, plant, and equipment acquired during October 2020.

There were no borrowings or repayments with respect to long-term liabilities in October 2020.

On September 15, 2020, Rainy Dayss board of directors voted to pay a $160,000 dividend to stockholders on October 31, 2020.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using Microsoft Excel And Access 20 For Accounting

Authors: Glenn Owen

5th Edition

133751229X, 9781337512299

More Books

Students also viewed these Accounting questions