P22-48B
Learning Objective 3 3. POHR $3 4. Adult bats COGS $74,175 P22-48B Preparing an operating budget-sales, production, direct materials, direct labor, overhead, COGS, and S&A expense budgets The Haney Batting Company manufactures wood baseball bats. Haney's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Haney sells the bats to sporting goods stores, and all sales are on account. The youth bat sells for $35; the adult bat sells for $55. Haney's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Haney's balance sheet for December 31, 2016, follows: HANEY BATTING COMPANY Balance Sheet December 31, 2016 Assets Current Assets Cash Accounts Receivable Raw Materials Inventory Finished Goods Inventory $ 40,000 17,900 9,000 16,450 2t. Total Current Assets $ 83,350 Property, plant, and Equipment: Equipment Less: Accumulated Depreciation 140,000 (10,000) 130,000 Total Assets $ 213,350 Liabilities $ 10,500 Current Liabilities: Accounts Payable Stockholders' Equity Common Stock, no par $ 140,000 Retained Earnings 62,850 Total Stockholders' Equity Total Liabilities and Stockholders' Equity 202,850 $ 213,350 CHAPTER 22 328 chapter 22 Additi Ca a. PL b. fo C. d. e. f. Other data for Haney Batting Company for the first quarter of 2017: a. Budgeted sales are 1,300 youth bats and 3,100 adult bats. b. Finished Goods Inventory on December 31 consists of 200 youth bats at $11 each and 750 adult bats at $19 each. c. Desired ending Finished Goods Inventory is 250 youth bats and 550 adult bats; FIFO inventory costing method is used. d. Direct materials cost is $13 per youth bat and $15 per adult bat. e. Desired ending Raw Materials Inventory is $9,000 (indirect materials are insignificant and not considered for budgeting purposes). f. Each bat requires 0.3 hours of direct labor; direct labor costs average $32 per hour. Variable manufacturing overhead is $0.40 per bat. Fixed manufacturing overhead includes $600 per quarter in depreciation and $1,525 per quarter for other costs, such as insurance and property taxes. i. Fixed selling and administrative expenses include $14,000 per quarter for salaries; $2,500 per quarter for rent; $1,900 per quarter for insurance; and $100 per quarter for depreciation. j. Variable selling and administrative expenses include supplies at 1% of sales. Requirements 1. Prepare Haney's sales budget for the first quarter of 2017. 2. Prepare Haney's production budget for the first quarter of 2017. 3. Prepare Haney's direct materials, direct labor budget, and manufacturing overhead budget for the first quarter of 2017. Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours. 4. Prepare Haney's cost of goods sold budget for the first quarter of 2017. 5. Prepare Haney's selling and administrative expense budget for the first quarter of 2017. P22-49B Preparing a financial budget-schedule of cash receipts, schedule of cash payments, cash budget Sosa Company has provided the following budget information for the first quart P22 Learning Objective 4 1. Total cash pmts. $179,935 2. Ending Cash bal. $35,765 2016
