Numericals

triOS COLLEGE BUSINESS . TECHNOLOGY . HEALTHCARE Question 6 (Absorption Costing) Asian Windows manufactures a hand-painted bamboo window shade for standard-size windows. Production and sales data for 2020 are as follows: Variable manufacturing costs $40 per shade Fixed manufacturing costs $100,000 Variable selling and administrative expenses $9 per shade Fixed selling and administrative expenses $250,000 Selling price $90 per shade Units produced 10,000 shades Units sold 8,500 shades Prepare an income statement using absorption costing. [5 marks] Question 7 Part "A": Sales, Production, & Direct Materials Budget Oak Creek Company is preparing its master budget for 2020. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales: Sales for the year are expected to total 1 million units. Quarterly sales are 20%, 25%, 25%, and 30%, respectively. The sales price is expected to be $40 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2021 are expected to be 10% higher than the budgeted sales for the first quarter of 2020. Production: Management desires to maintain the ending finished goods inventories at 20% of the next quarter's budgeted sales volume. Direct materials: Each unit requires 2 kg of raw materials at a cost of $10 per kilogram. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2020 are 500,000 kg. Instructions Prepare the sales, production, and direct materials budgets by quarters for 2020. [10 marks]