Operating Budget Comprehensive Analysis Ponderosa, Inc. produces wiring hamess assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below January 10,000 February 10.500 March 12,200 April 16.000 Mary 18.500 The following data pertain to production policies and manufacturing specficabons followed by Ponderosa Finished goods inventory on January 1900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b. The data on materials used are as follows Direct Material Per Unit Usage Unit Cost Part 298 2 34 Part 3 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satuly 30 percent of the next month's production neede. The exactly the amount of material on hand on January c. The direct laborused per unit of output is one and one-half hours. The average direct labor cost per hour in $20. Overhead each month is estimated using a table budget formula, (Activity is measured in direct tobor hours) Fixed Cost Variable Cout Component Component Supplies $1.00 Power 0.20 Maintenance 12,600 1.10 Supervision 14.000 Depreciation 45,000 4.300 Other 36.000 1.60 e. Monthly selling and administrative expenses are also estimated using a feble budgeting formula. (Activity a memured in units old) Fixed Costs Variable Costs Salanes 558,600 Commissions $1.40 Deprecation 25.000 Shipping 3.60 Other 137.000 1.60 f. The unit selling one of the ring hamessembly is $110. g. In February, the company plans to purchase and for future expansion. The land costs $68.000 All sales and purchases are for cash. The cash balance on January 2 equal $62.900. The firm wants to have an ending cash balance of at least 525,000. aash shortage develope scient cash is borreved to cover the shortage and provide the desired anding balance. Anch bord must be borrowed in $1,000 increments and read the following month, as is the interest due. The interest rate is 12 percent per annum 3. Direct materials purchases budget January February Marth Yotal Dart K298 Dart 30 Part 298 Part 30 Part 298 Part C30 Part 29 Part 0 Units produced 11,200 11,200 11.040 11,040 13,700 13,760 36,000 36.000 Dit mat per unit 3 27 31 2 2 Production needs 22,400 33,000 22,080 33,120 27,520 41,20 72.000 100,000 Desired Et 9,900 Tutal needed 37,420 Less 1 0.720 10,000 0,024 9,936 1.256 12.14 matto Purchase IDIO cost per unit 4 Total purchase Accounting numeric field co 8. Cost of goods sold budget Direct materials used Part K298 Part C30 si Direct labor used Overhead 696,300 Budgeted manufacturing costs Add: Beginning finished goods 70,506 Goods available for sale Less: Ending finished goods 250,688 Budgeted cost of goods sold Feedback 9. Budgeted income statement (ignore income taxes) Sales Less: Cost of goods sold Gross margin Less: Selling and administrative expense Income before income taxes Feedback 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "O" January February March Total Beginning balance 62,900 62,900 Cash receipts 1,100,000 1,155,000 1,452,000 3,707,000 1,162,900 3,769,900 Total cash available Disbursements: Purchases DL payroll 336,000 331,200 412,800 1,080,000 Overhead Marketing & admin Land Total disbursements Ending balance HII II II II II III Financing: Borrowed/repaid Interest paid Ending cash balance Feedback Operating Budget Comprehensive Analysis Ponderosa, Inc. produces wiring hamess assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below January 10,000 February 10.500 March 12,200 April 16.000 Mary 18.500 The following data pertain to production policies and manufacturing specficabons followed by Ponderosa Finished goods inventory on January 1900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b. The data on materials used are as follows Direct Material Per Unit Usage Unit Cost Part 298 2 34 Part 3 3 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satuly 30 percent of the next month's production neede. The exactly the amount of material on hand on January c. The direct laborused per unit of output is one and one-half hours. The average direct labor cost per hour in $20. Overhead each month is estimated using a table budget formula, (Activity is measured in direct tobor hours) Fixed Cost Variable Cout Component Component Supplies $1.00 Power 0.20 Maintenance 12,600 1.10 Supervision 14.000 Depreciation 45,000 4.300 Other 36.000 1.60 e. Monthly selling and administrative expenses are also estimated using a feble budgeting formula. (Activity a memured in units old) Fixed Costs Variable Costs Salanes 558,600 Commissions $1.40 Deprecation 25.000 Shipping 3.60 Other 137.000 1.60 f. The unit selling one of the ring hamessembly is $110. g. In February, the company plans to purchase and for future expansion. The land costs $68.000 All sales and purchases are for cash. The cash balance on January 2 equal $62.900. The firm wants to have an ending cash balance of at least 525,000. aash shortage develope scient cash is borreved to cover the shortage and provide the desired anding balance. Anch bord must be borrowed in $1,000 increments and read the following month, as is the interest due. The interest rate is 12 percent per annum 3. Direct materials purchases budget January February Marth Yotal Dart K298 Dart 30 Part 298 Part 30 Part 298 Part C30 Part 29 Part 0 Units produced 11,200 11,200 11.040 11,040 13,700 13,760 36,000 36.000 Dit mat per unit 3 27 31 2 2 Production needs 22,400 33,000 22,080 33,120 27,520 41,20 72.000 100,000 Desired Et 9,900 Tutal needed 37,420 Less 1 0.720 10,000 0,024 9,936 1.256 12.14 matto Purchase IDIO cost per unit 4 Total purchase Accounting numeric field co 8. Cost of goods sold budget Direct materials used Part K298 Part C30 si Direct labor used Overhead 696,300 Budgeted manufacturing costs Add: Beginning finished goods 70,506 Goods available for sale Less: Ending finished goods 250,688 Budgeted cost of goods sold Feedback 9. Budgeted income statement (ignore income taxes) Sales Less: Cost of goods sold Gross margin Less: Selling and administrative expense Income before income taxes Feedback 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "O" January February March Total Beginning balance 62,900 62,900 Cash receipts 1,100,000 1,155,000 1,452,000 3,707,000 1,162,900 3,769,900 Total cash available Disbursements: Purchases DL payroll 336,000 331,200 412,800 1,080,000 Overhead Marketing & admin Land Total disbursements Ending balance HII II II II II III Financing: Borrowed/repaid Interest paid Ending cash balance Feedback