Operating Budget, Comprehensive Analysis
Ponderosa, Inc., produces wiring harness 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.
January10,000February10,500March13,700April16,000May18,500
The following data pertain to production policies and manufacturing specifications followed by Ponderosa:
- Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales.
- The data on materials used are as follows:Direct MaterialPer-Unit UsageUnit CostPart #K2982$4Part #C3037
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Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i.. Chapter 9 eBook Print Item Operating Budget, Comprehensive Analysis ? Ponderosa, Inc., produces wiring harness 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 13,700 Apri 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: a. Finished goods inventory on January 1 is 900 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 #K298 $4 Part #C30 7 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Variable Cost Component Component Supplies $- $1.00 Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i.. Chapter 9 1 eBook Print Item 8. Cost of goods sold budget ? Direct materials used Part K298 Part C30 Direct labor used Overhead Budgeted manufacturing costs 69 Add: Beginning finished goods Goods available for sale Less: Ending finished goods Budgeted cost of goods sold Feedback Check My Work See Cornerstone 8.7. 0 Rudnoted income statement (innoro income tavac) Check My Work Next 2:15 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin x + X CA https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 1 eBook Print Item Feedback ? Check My Work See Cornerstone 8.7. 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 Check My Work See Cornerstone 8.10. 10. Cash budget Check My Work Next Type here to search O 2:15 PM 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X D https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 Print Item 90% + Reset 1 eBook ? 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "0". January February March Total Beginning balance Cash receipts Total cash available Disbursements: Purchases DL payroll Overhead Marketing & admin Land Total disbursements Ending balance Financing: Borrowed/repaid Interest paid Ending cash balance Check My Work Next Assignment Score: 18.5% Email Instructor Save and Exit Submit Assignment for Grading 2:15 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i.. Chapter 9 eBook Print Item Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of material on ? hand on January 1. c. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Variable Cost Component Component Supplies $ $1.00 Power 0.20 Maintenance 12,500 1.10 Supervision 14,000 Depreciation 45,000 Taxes 4,300 Other 86,000 1.60 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 Commissions $1.40 Depreciation 25,000 Shipping 3.60 Other 137,000 1.60 f. The unit selling price of the wiring harness assembly is $110. g. In February, the company plans to purchase land for future expansion. The land costs $68,000. h. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient ark in hare and provide the daniend anding halanne Anus ranaid the following month on in the interant Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your ( X CengageNOWv2 | Online teachin x + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 1 eBook Print Item Commissions $1.40 ? Depreciation 25,000 Shipping 3.60 Other 137,000 1.60 f. The unit selling price of the wiring harness assembly is $110. g. In February, the company plans to purchase land for future expansion. The land costs $68,000. h. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: Prepare a monthly operating budget for the first quarter with the following schedules: 1. Sales budget January February March Total Units 10,000 10,500 V 13,700 V 34,200 V Unit selling 110 110 110 110 V price Sales 1,100,000 V $ 1,155,000 1,507,000 V 3,762,000 V Feedback Check My Work See Cornerstone 8. 1. Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin x + X CA https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 1 eBook Print Item ? 2. Production budget January February March Total Unit sales 10,000 10,500 13,700 V 34,200 V Desired ending inventory 2,100 2,740 3,200 3,200 V Total needed 12,100 13,240 16,900 37,400 V Less: Beginning -900 2,100 -2,740 -900 inventory Units produced 11,200 11,140 14,160 36,500 V Feedback Check My Work See Cornerstone 8.2. 3. Direct materials purchases budget January February March Total Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your ( X CengageNOWv2 | Online teachin x + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 1 eBook Print Item ? 3. Direct materials purchases budget January February March Total Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Units produced 11,200 V 11,200 11,140 11,140 14,160 14,160 36,500 36,500 Dir. mat. per unit 2 V 3 V 2 V 3 V 2 V 3 2 3 V Production 22,400 33,600 22,280 33,420 28,320 42,480 73,000 109,500 needs Desired EI Total needed Less: BI 6,720 V Dir. mat. to purchase Cost per unit 4 7 V 4 V 7 V 4 V 7 V 4 V 7 Total purchase cost Check My Work Next Type here to search O 2:14 PM 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin x + X https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 1 eBook Print Item Check My Work ? See Cornerstone 8.3. 4. Direct labor budget. Round your answers to two decimal places, if required. January February March Total Units to be produced Direct labor time per unit (hrs.) Total hours needed Wages per hour Total direct labor cost Feedback Check My Work See Cornerstone 8.4. 5. Overhead budget. Round your answers to two decimal places, if required. January February March Total Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your ( X CengageNOWv2 | Online teachin x + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i.. Chapter 9 1 eBook Print Item See Cornerstone 8.4. ? 5. Overhead budget. Round your answers to two decimal places, if required. January February March Total Budgeted direct labor hours Variable overhead rate Budgeted var. overhead Budgeted fixed overhead Total overhead cost Feedback Check My Work See Cornerstone 8.5. 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. January February March Total Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin x + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i.. Chapter 9 7 eBook Print Item See Cornerstone 8.5. ? 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. January February March Total Planned sales Variable selling & administrative expense per unit Total variable expense Fixed selling & administrative expense: Salaries Depreciation Other Total fixed expenses Total selling & administrative expenses Feedback Check My Work See Cornerstone 8.9. Check My Work Next 2:14 PM Type here to search O 3/4/2021Arizona Western College | Your C X CengageNOWv2 | Online teachin X + X C A & https://v2.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do?invoker=&takeAssignmentSessionLocator=&i... Chapter 9 eBook Print Item 7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. ? Unit cost computation: Direct materials: Part K298 Part C30 Direct labor Overhead: Variable Fixed Total unit cost Number of units Finished goods Feedback Check My Work See Cornerstone 8.6. Check My Work Next 2:14 PM Type here to search O 3/4/2021
