Materials and Labor Requirements Direct materials Wood Fiberglass Direct manufacturing labor 13 board feet (b.f.) per snowboard 11 yards per snowboard 7 hours per snowboard Skubas's CEO expects to sell 3,400 snowboards during January 2018 at an estimated retail price of $1,000 per board. Further, the CEO expects 2018 beginning inventory of 700 snowboards and would like to end January 2018 with 800 snowboards in stock. Direct Materials Inventories Ending Inventory 1/31/2018 Wood Beginning Inventory 1/1/2018 2,060 b.f. 1,060 yards 1,560 b.f. Fiberglass 2,060 yards Variable manufacturing overhead is $16 per direct manufacturing labor-hour. There are also $98,000 in fixed manufacturing overhead costs budgeted for January 2018. Skubas combines both variable and fixed manufacturing overhead into a single rate based on direct manufacturing labor-hours. Variable marketing costs are allocated at the rate of $310 per sales visit. The marketing plan calls for 40 sales visits during January 2018. Finally, there are $37,000 in fixed nonmanufacturing costs budgeted for January 2018. 2017 Unit Price 2018 Unit Price Wood $ $ 36.00 per b.f. 11.00 per yard $ 34.00 per b.f. 10.00 per yard 30.00 per hour Fiberglass Direct manufacturing labor $ $ $ 31.00 per hour Skubas, Inc., manufactures and sells snowboards. Skubas manufactures a single model, the Pipex. In late 2017, Skubas's management accountant gathered the following data to prepare budgets for January 2018: Click the icon to view the materials and labor requirements) (Click the icon to view the additional information.) Other data include: (Click the icon to view the other data.) The inventoriable unit cost for ending finished goods inventory on December 31, 2017, is $200.00. Assume Skubas uses a FIFO inventory method for both direct materials and finished goods. Ignore work in process in your calculations. Requirement 1. Prepare the January 2018 revenues budget (in dollars) Revenue Budget For January 2018 Units Selling price Total revenues Snowboards Requirement 2. Prepare the January 2018 production budget (in units). Production Budget For January 2018 Budgeted units sales 3,400 800 Add target ending finished goods inventory Total required units Deduct beginning finished goods inventory 700 Units of finished goods to be produced Requirement 3. Prepare the direct material usage and purchases budgets for January 2018. Begin with the physical units tion, then prepare the cost budget portion of the direct material usage budget. Direct Material Usage Budget in Quantity and Dollars For January 2018 Material Wood Fiberglass Total Physical Units Budget Direct materials required for Snowboards b.f. yds Cost Budget Cost Budget Available from beginning direct materials inventory (under a FIFO cost-flow assumption) Wood Fiberglass To be purchased this period Wood III Fiberglass Direct materials to be used this period Now prepare the direct material purchases budget for January 2018. Direct Materials Purchases Budget Direct Materials Purchases Budget For January 2018 Materials Wood Fiberglass Total b.f. yards Physical Units Budget To be used in production Add target ending inventory Total requirement Deduct beginning inventory 1,560 b.t. 2,060 yards yards b.f. 2,060 b.f. 1,060 yards Purchases to be made b.f. yards Cost Budget Lost Budget Purchases Requirement 4. Prepare a direct manufacturing labor budget for January 2018. (Abbreviation used: DMLH = Direct manufacturing labor hours.) Direct Manufacturing Labor Costs Budget For January 2018 Output Units DMLH Total Hourly Produced Hours Wage Rate per Unit Total Snowboards 7 Requirement 5. Prepare a manufacturing overhead budget for January 2018. Begin the manufacturing overhead cost budgets by first determining the formula, then calculate the variable manufacturing overhead costs. (Abbreviation used: Manuf. = Manufacturing.) = Variable manufacturing overhead costs X Now prepare the manufacturing overhead cost budgets. Manufacturing Overhead Budget For January 2018 Variable manufacturing overhead costs Fixed manufacturing overhead costs Total Requirement 6. What is the budgeted manufacturing overhead rate for January 2018? Begin by determining the formula, then enter the appropriate amounts to calculate the budgeted manufacturing overhead rate for January 2018. (Abbreviation used: Manuf. = Manufacturing. Round the overhead rate to the nearest cent.) = Budgeted manufacturing overhead rate Requirement 7. What is the budgeted manufacturing overhead cost per output unit in January 2018? Begin by determining the formula, then enter the appropriate amounts to calculate the budgeted manufacturing overhead cost per output unit in January 2018. (Abbreviation used: Manuf. = Manufacturing. Round the overhead cost per output unit to the nearest whole dollar.) Budgeted manufacturing overhead cost per output unit 104. Une . Calculate the cost of a snowboard manufactured in January 2018 Unit Costs of Manufacturing Finished Goods For January 2018 Input per unit unit Cost per of input of output Total Direct materials Wood Fiberglass Direct manufacturing labor Budgeted manufacturing overhead cost 13 b.f. 11 yds. 7 hrs. Total Requirement 9. Prepare an ending inventory budget for both direct materials and finished goods for January 2018. Ending Inventories Budget For January 2018 Quantity Cost per unit Total Direct materials Wood 1,560 2,060 Fiberglass Finished goods Snowboard Total ending inventory 800 Requirement 10. Prepare a cost of goods sold budget for January 2018. Cost of Goods Sold Budget For January 2018 Beginning finished goods inventory, January 1 Direct materials used Direct manufacturing labor Manufacturing overhead Cost of goods manufactured Cost of goods available for sale Deduct ending finished goods inventory, January 31 Cost of goods sold MO ly, January 31 Cost of goods sold Requirement 11. Prepare the budgeted income statement for Skubas, Inc., for January 2018. Budgeted Income Statement For January 2018 Revenues Cost of goods sold Gross margin Operating (nonmanufacturing) costs Operating income