Mostly need help with part 2 (a,b, and c)
Budgeting for Sales, Production, 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 ecember 31, are expected to be as follows First quarter 80,ooo Second quarter 84,0oo Third quarter 88,ooo 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 43,0oo pounds Each unit of product requires o.10 direct labor hours at a cost of $14 per hour Variable manufacturing overhead costs are Indirect materials Indirect labor - - $o.20 per unit $0.15 per unit $o.10 per unit Other Fixed manufacturing overhead costs per quarter are - Salaries $80,0o0 Other $70,000 Depreciation $55,625 Required: a. Prepare a sales budget using the format shown in Figure 9.3. b. Prepare a production budget using the format shown in Figure 9.4. c. Prepare a direct materials purchases budget using the format shown in Figure 9.5 d. Prepare a direct labor budget using the format shown in Figure 9.6 e. Prepare a manufacturing overhead budget using the format shown in Figure 9.7. Round to the nearest dollar f As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters? Selling and Administrative Budget and Budgeted Income Statement. (The previous problem must be completed before working this problem.) Sports Bars, Inc., produces energy bars Management estimates all selling and administrative costs are fixed. Quarterly selling and administrative cost estimates for the coming year follow Salaries Rent $170,000 $ 65,000 Advertising $120,000 Depreciation 75,000 Other $ 36,000 Required: a. Use the information presented previously to prepare a selling and administrative budget. Refer to the format shown in Figure 9.8. b. Use the information from the previous problem and from requirement a of this problem to prepare a budgeted income statement. Refer to the format shown in Figure 9.9. c. How will management use the information presented in the budgeted income statement? Budgeting for Sales, Production, 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 ecember 31, are expected to be as follows First quarter 80,ooo Second quarter 84,0oo Third quarter 88,ooo 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 43,0oo pounds Each unit of product requires o.10 direct labor hours at a cost of $14 per hour Variable manufacturing overhead costs are Indirect materials Indirect labor - - $o.20 per unit $0.15 per unit $o.10 per unit Other Fixed manufacturing overhead costs per quarter are - Salaries $80,0o0 Other $70,000 Depreciation $55,625 Required: a. Prepare a sales budget using the format shown in Figure 9.3. b. Prepare a production budget using the format shown in Figure 9.4. c. Prepare a direct materials purchases budget using the format shown in Figure 9.5 d. Prepare a direct labor budget using the format shown in Figure 9.6 e. Prepare a manufacturing overhead budget using the format shown in Figure 9.7. Round to the nearest dollar f As the production manager, what concerns, if any, do you have about production requirements for each of the four quarters? Selling and Administrative Budget and Budgeted Income Statement. (The previous problem must be completed before working this problem.) Sports Bars, Inc., produces energy bars Management estimates all selling and administrative costs are fixed. Quarterly selling and administrative cost estimates for the coming year follow Salaries Rent $170,000 $ 65,000 Advertising $120,000 Depreciation 75,000 Other $ 36,000 Required: a. Use the information presented previously to prepare a selling and administrative budget. Refer to the format shown in Figure 9.8. b. Use the information from the previous problem and from requirement a of this problem to prepare a budgeted income statement. Refer to the format shown in Figure 9.9. c. How will management use the information presented in the budgeted income statement
