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Mike's Bikes makes and sells highquality replacement gears for mountain bikes. Mike Sacedway, controller, is responsible for preparing the master budget and has assembled the
Mike's Bikes makes and sells highquality replacement gears for mountain bikes. Mike Sacedway, controller, is responsible for preparing the master budget and has assembled the following data for 2016. The direct labour rete includes wages and all employee-related benefits and the employer's share of Canada Pension Plan (CPP) and Employment Insurance (ET). Labour-saving machinery will be fully operational by February. Also, as of March 1, the company's union contract calls for an increase in direct labour wages that is included in the direct labour rate. Mike's Bikes expects to have 124 gear units in Inventory at December 31, 2015, and has a policy of carrying 5% of the following month's projected sales In Inventory during the first quarter of the year. Mike's Bikes has 20 kg. of direct materials on hand at December 31, 2015 and has a policy of carrying 5% of the following month's projected production needs in inventory during the first quarter of the year. January February March April Estimated unit sales 992 1,240 2,480 2,976 Sales price per unit $25 $25 $20 $20 Direct labour hours per unit 0.75 0.50 0.50 0.50 Direct labour hourly rate $18 $18 $20 $20 Direct materials cost per unit $7 $7 $7 $7 Direct materials per gear 0 .30 kg 0.30 kg 0.30 kg 0.30 kg Prepare the following budgets for Mile's Bikes for the first quarter of 2016. Be sure to show supporting calculations: (1) Sales Budget March Total 14712 Sales Salas price per unit 5eles Revue 105400 (2) Production Budget in units. February March 4712 52 325 Ending Inventory Beginning Inventory 112 310 737 2505 1 (3) Direct Materials Budget in units and cost. January February March Total 302 2505 11737 279 Direct Materials ladd Ending Inventury Beginning Tnventory Purchases Direct Material cost (4) Direct Labour Budget in hours. Total Direct Labour hours Direct Labour hourly ra pirect Material cast
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