Master Budget Plum Inc. has gathered the following budgeting information for next year and has asked you to prepare their master budget. a. b. Sales for the final quarter of the prior year total 2,400 units. Expected sales (in units) for the current year are: 2,160 (Quarter 1). 1,440 (Quarter 2), 1,920 (Quarter 3), and 1,920 (Quarter 4). Sales for the first quarter of the following year total 2,880 units. The selling price is $570 per unit In the first three quarters of the year, and $600 per unit in the final quarter. Company policy calls for a given quarter's ending finished goods inventory to equal 90% of the next quarter's expected unit sales. The finished goods inventory at the end of the prior year is 1,944 units, which complies with the policy. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.). $40 for direct labor (2 hours $20 direct labor rate per hour). $23 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $25,900; factory utilities, $32,400, and other factory overhead of $6,404. c. Company policy also calls for a given quarter's ending raw materials inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end inventory is 3,024 lbs of materials, which complies with the policy. The company expects to have 5,760 lbs. of materials in inventory at year-end. The company has no work in process inventory at the end of any quarter. d. Sales representatives' commissions are 16% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $134,000 in the first three quarters of the year, and $143,000 in the final quarter. e. Quarterly general and administrative expenses include $57,000 administrative salaries, rent expense of $34,000 per quarter, insurance expense of $27,000 per quarter, straight- line depreciation of $27,000 per quarter, and 1% monthly interest on the $150,000 long-term note payable (12% annually). f Income taxes will be assessed at 30%, and are paid in the quarter incurred. Production Direct Mtis Budget Budget Sales Budget Direct Lor Budget Cost of Income Goods Sold Statement Factory OH Selling Exp Admin Exp Budget Budget Budget Requirement: Prepare the production budget for Plum Inc.. Company policy calls for a given quarter's ending finished goods Inventory to equal 90% of the next quarter's expected unit sales. The finished goods Inventory at the end of the prior year is 1,944 units, which complies with the policy. Expected sales (in units) for the current year are: 2,160 (Quarter 1), 1,440 (Quarter 2), 1,920 (Quarter 3), and 1,920 (Quarter 4). Sales for the first quarter of the following year total 2,880 units. Show less Plum Inc. Production Budget For the year anded December 31, 2018 First tr Second Qtr. Third Qur Fourth Otr. Total Nestor's budgeted sales (units) Ratio of inventory to future sales Budgeted ending inventory (units) Required units of available production Units to be produced (Sales Budget Direct Mus Budget > Requirement Prepare the Direct Materials Budget for Plum Inc. Company. Company policy calls for a given quarter's ending raw materials Inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end Inventory is 3,024 lbs of materials, which complies with the policy. The company expects to have 5,760 lbs. of materials in Inventory at year-end. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.), $40 for direct labor (2 hours x $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Show less Pium Inc Direct Materials Budget For the year ended December 31, 2018 First Our Second Qur. Third Qtr. Total Fourth Qtr Budgeted production (units) Materials needed for production (pounds) Total materials requirements (pounds) Materials to be purchased (pounds) Total cost of direct materials purchases 1 Requirement Prepare the Direct Labor Budget for Plum Inc.. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.), $40 for direct labor (2 hours x $20 direct labor rate per hour), 523 for variable overhead, and $8 for fixed overhead. Plum Inc Direct Labor Budget For the year ended December 31, 2018 Firat Qtr. Second Qur. Third Qtr. Fourth Qtr. Total Total direct labor hours needed Total budgeted direct labor cost (dollars) Requirement Prepare the Factory Overhead Budget for Plum Inc.. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.), $40 for direct labor (2 hours x $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $25,900; factory utilities, $32,400, and other factory overhead of $6,404. Show less Plum Inc. Factory Overhead Budget For the year onded December 31, 2018 First Qtr. Second Qtr Third Qtr. Total Fourth Qur Budgeted variable overhead Budgeted total overhead Requirement Prepare the selling expense budget for the Plum Inc.. Sales representatives' commissions are 16% of sales and are paid in the quarter of the sales. The sales manager's quarterly salary will be $134,000 in the first three quarters of the year, and $143,000 in the final quarter. Plum Inc. Selling Expense Budget For the year anded December 31, 2018 First Qur. Second Qur. Third Qur Fourth Atr. Total $ 1,231,200 $ 820,800 $ 1,100,100 $ 1,094,400 $ 4,246,500 5 Salos commissions 134,000 134,000 134.000 143,000 545.000 Total budgeted selling expenses Direct Muis Production Direct Lbr Factory OH Selling Exp Admin Exp Cost of Sales Budget Income Budget Budget Budget Budget Budget Budget Goods Sold Statement Requirement Prepare the Administrative Expense Budget for Plum Inc. Quarterly general and administrative expenses include $57,000 administrative salaries, rent expense of $34,000 per quarter, insurance expense of $27,000 per quarter, straight-line depreciation of $27,000 per quarter, and 1% monthly interest on the $150,000 long-term note payable (3% quarterly). Show less Plum Inc General and Administrative Budget For the year ended December 31, 2018 First Qur Second Qur. Third Qur. Fourth Qtr. Total Total budgeted general and administrative expenses Requirement Using information from the sales budget and the following information, calculate the budgeted cost of goods sold for Plum Inc. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per Ib.), $40 for direct labor (2 hours x $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $25,900; factory utilities, $32,400, and other factory overhead of $6,404. Show less Plumn Inc. Cost of Goods Sold Budget For the year ended December 31, 2018 First Qtr. Second Otr 2,160 1440 Fourth Qtr. Third or 1.930 Total 7,450 1.920 Cost of goods sold Admin Exp Budget Income Statement > Sales Budget Production Direct Muis Direct Lor Factory OH Selling Exp Admin Exp Cost of Income Budget Budget Budget Budget Budget Budget Goods Sold Statement Requirement Prepare the Budgeted Income Statement for the year for Plum Inc. Interest on the $150,000 long- term note payable is 1% per month (12% annually). Income taxes will be assessed at 30%, and are paid in the quarter Incurred. Plum Inc Budgeted Income Statement For the year endod December 31, 2018 Sales Cost of goods sold Gross profit Operating expenses: Selling expenses Administrative expenses Interest expense Total operating expenses Income before income taxes Income tax expense Not income Sales Budget Production Budget Direct Muis Budget Direct L.br Budget Factory OH Selling Exp Admin Exp Budget Budget Budget Cost of Income Goods Sold Statement Requirement Prepare the Direct Materials Budget for Plum Inc. Company. Company policy calls for a given quarter's ending raw materials Inventory to equal 50% of next quarter's expected materials needed for production. The prior year-end Inventory is 3,024 lbs of materials, which complies with the policy. The company expects to have 5,760 lbs. of materials in Inventory at year-end. The product's manufacturing cost is $i27 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per 1b.), $40 for direct labor (2 hours * $20 direct labor rate per hour), $25 for variable overhead, and $8 for fixed overhead. Show less Plumn Inc Direct Material Budget For the year ended December 31, 2018 First Qtr. Socand atr Third Qtr Fourth Qir. Total Budgeted production (units) Materials needed for production (pounds) Total materials requirements (pounds) Materials to be purchased (pounds) Total cost of direct materiale purchases Sales Budget Production Budget Direct Mtis Budget Direct Lbr Factory OH Selling Exp Admin Exp Budget Budget Budget Budget Cost of Income Goods Sold Statement 14:28 Requirement Prepare the Direct Labor Budget for Plum Inc.. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.), $40 for direct labor (2 hours * $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Plum Inc. -K Direct Labor Budget For the year onded December 31, 2018 ces First Qtr. Second Qtr. Third Qtr. Fourth Qtr. Total Total direct labor hours needed Total budgeted direct labor cost (dollars) Sales Budget Production Budget Direct Mtis Budget Direct Lbr Factory OH Selling Exp Admin Exp Budget Budget Budget Budget Cost of Income Goods Sold Statement 13 Requirement Prepare the Factory Overhead Budget for Plum Inc.. The product's manufacturing cost is $127 per unit, including per unit costs of $56 for materials (4 lbs. at $14 per lb.), $40 for direct labor (2 hours x $20 direct labor rate per hour), $23 for variable overhead, and $8 for fixed overhead. Annual fixed overhead consists, incurred evenly throughout the year, consist of depreciation on production equipment, $25,900; factory utilities, $32,400, and other factory overhead of $6,404. Show less Plum Inc. Factory Overhead Budget For the year ended December 31, 2018 5 First Qtr. Second Qir Third Qur. Fourth ar Total Variable factory overhead rate Budgeted variable overhead Budgeted total overhead