Managerial Accounting problem??

39. Budgeting for Sales, Produetion, Direct Materials, Direct Labor, and Manufacturing Overhead. Sports Bars Inc., produces energy bars and sells them by the case (1 unit = 1 case). Information to be used for the operating budget this coming year follows: Average sales price for each case is estimated to be $25. Unit sales for this coming year, ending December 31, are expected to be as follows: First quarter 8o,000 Second quarter 84,000 Third quarter 88.000 Fourth quarter 97,000 Finished goods inventory is maintained at a level equal to 15 percent of the next quarter's sales. Finished goods inventory at the end of the fourth quarter budget period is estimated to be 13.000 units. Each unit of product requires 5 pounds of direct materials, at a cost of $3 per pound. Management prefers to maintain ending raw materials inventory equal to 10 percent of next quarter's materials needed in production. Raw materials inventory at the end of the fourth quarter budget period is estimated to be 43,000 pounds. Each unit of produet requires o.10 direct labor hours at a cost of S14 per hour Variable manufacturing overhead costs are Indirect materials $o.20 per unit Indirect labor So.15 per unit Other So.10 per unit Fixed manufacturing overhead costs per quarter are Salaries $8o,000 Other $70,000 Depreciation $55.625 Required: a. Prepare a sales budget using the format shown in Figare 9.9. b. Prepare a production budget using the format shown in Figure o.4. c. Prepare a direct materials purchases budget using the format shown in Figure 9.5 d. Prepare a direct labor budget using the format shows in Figure 9.6. e. Prepare a manufacturing overhead budget using the format shown in Figuire 9.7. Round to the nearest dollar As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters? Budgeted Income Statement. (The previous problem must be completed A BC Hi E Jl F G K L M 2 PROBLEMS (continued) 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead 4 Sales budget 6 a. Sports Bars, Inc. Sales Budget 8 Year Ending December 31 TH 11 Quarter 12 2 3 4 Year 13 Projected sales in units Sales price per unt 14 $25 $25 $25 $25 $25 x Sales revenue 15 16 17 b. Production budget 18 Sports Bars, Inc. Production Budget Year Ending December 31 19 20 22 Quarter 23 Year Sales in units (from sales budget) Add desired ending finished goods inventory 24 25 13,000 13,000 26 Total finished goods inventory needed Deduct beginning finished goods inventory 27 Units to be produced 28 350,000 29 31 32 hal Formak as BIU- Merge & Center ChecK Cell aste Format Painter Formatting Table Font Alignment Number Clipboard A1 H AB C F N P G K L M PROBLEMS (continued) 2 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead (continued) 6 Direct materials purchases budget C. Sports Bars, Inc. Direct Materials Purchases Budget 8 Year Ending December 31 11 Quarter 21 Year Units to be produced (from production budget) Materials required per unit (pounds) Materials needed in production 13 14 15 Add desired ending inventory 16 Materials needed in inventory 17 Deduct beginning inventory Direct materials to be purchased (pounds) Cost of materials per pound 18 19 20 Cost of materials to be purchased 21 $1.417,575 Direct materials cost per unit 22 $15 23 Alignment Number fr ABC D F F G JI K LI M N K P PROBLEMS (continued) 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead (continued) d. Direct labor budget Sports Bars, Inc. Direct Labor Budget Year Ending December 31 9 11 Quarter 12 3 13 Units to be produced (from production budget) Drect labor hours per unit Year 14 15 Total direct labor hours needed in production 16 Labor rate per hour Total direct Jabor cost 17 Direct labor cost per unit 18 19 21 22 2 PROBLEMS (continued) 39. Budgeting for Sales, Production, Direct Materials, Direct Labor, and Manufacturing Overhead (continued) 4 The production budget shows the following trend in production from one quarter to the next: 7 f. First Second Third Fourth 10 Quarter Quarter Quarter Quarter 11 13 14 15 16 17 18 19 20