PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h] Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more
PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h]
Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales:
| | |
| January | 2,300 |
| February | 2,700 |
| March | 3,100 |
| April | 2,900 |
| May | 2,000 |
| |
Wesleys ending finished goods inventory policy is 20 percent of the next months sales. Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following months production requirements. Materials other than the housing unit total $3.50 per handisaw. Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 21,000 units) and $0.80 per unit variable manufacturing overhead. Wesleys selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $17,000 per month. Required: 1. Compute the budgeted cost of goods sold for the first quarter.
2. Compute the budgeted selling and administrative expenses for the first quarter.
3. Complete the budgeted income statement for the handisaw product for the first quarter.
PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h) Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales: January February March April May 2,300 2,700 3,100 2,900 2,000 Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $3.50 per handisaw. Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 21,000 units) and $0.80 per unit variable manufacturing overhead. Wesley's selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $17,000 per month. Required: 1. Compute the budgeted cost of goods sold for the first quarter. 2. Compute the budgeted selling and administrative expenses for the first quarter. 3. Complete the budgeted income statement for the handisaw product for the first quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted selling and administrative expenses for the first quarter. January 26,660 February 28,340 March 30,020 1st Quarter Total $ 85,020 $ $ Required 1 Required 3 > PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h) Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales: January February March April May 2,300 2,700 3,100 2,900 2,000 Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $3.50 per handisaw. Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 21,000 units) and $0.80 per unit variable manufacturing overhead. Wesley's selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $17,000 per month. Required: 1. Compute the budgeted cost of goods sold for the first quarter. 2. Compute the budgeted selling and administrative expenses for the first quarter. 3. Complete the budgeted income statement for the handisaw product for the first quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted cost of goods sold for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.) January 51,106 February 59,994 March 68,882 1st Quarter Total $ 179,982 Budgeted Cost of Goods Sold $ $ $ ( Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete the budgeted income statement for the handisaw product for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.) WESLEY POWER TOOLS Budgeted Income Statement For the Quarter Ending March January February $ 161,000 $ 189,000 51,106 59,994 $ March 217,000 6 8,882 1st Quarter Total $ 567,000 179,982 Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Gross Profit Budgeted Selling and Administrative Expenses Budgeted Net Operating Income $ 83,234|$ 100,666 $ 118,098 $ 301,998 ( Required 2 Required 3 ) PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h) Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales: January February March April May 2,300 2,700 3,100 2,900 2,000 Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $3.50 per handisaw. Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 21,000 units) and $0.80 per unit variable manufacturing overhead. Wesley's selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $17,000 per month. Required: 1. Compute the budgeted cost of goods sold for the first quarter. 2. Compute the budgeted selling and administrative expenses for the first quarter. 3. Complete the budgeted income statement for the handisaw product for the first quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted selling and administrative expenses for the first quarter. January 26,660 February 28,340 March 30,020 1st Quarter Total $ 85,020 $ $ Required 1 Required 3 > PA8-5 (Algo) Preparing Operating Budget Components [LO 8-3f, g, h) Wesley Power Tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw sells for $70. Wesley expects the following unit sales: January February March April May 2,300 2,700 3,100 2,900 2,000 Wesley's ending finished goods inventory policy is 20 percent of the next month's sales. Suppose each handisaw takes approximately 0.65 hours to manufacture, and Wesley pays an average labor wage of $13.50 per hour. Each handisaw requires a plastic housing that Wesley purchases from a supplier at a cost of $6.00 each. The company has an ending direct materials inventory policy of 10 percent of the following month's production requirements. Materials other than the housing unit total $3.50 per handisaw. Manufacturing overhead for this product includes $66,000 annual fixed overhead (based on production of 21,000 units) and $0.80 per unit variable manufacturing overhead. Wesley's selling expenses are 6 percent of sales dollars, and administrative expenses are fixed at $17,000 per month. Required: 1. Compute the budgeted cost of goods sold for the first quarter. 2. Compute the budgeted selling and administrative expenses for the first quarter. 3. Complete the budgeted income statement for the handisaw product for the first quarter. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the budgeted cost of goods sold for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.) January 51,106 February 59,994 March 68,882 1st Quarter Total $ 179,982 Budgeted Cost of Goods Sold $ $ $ ( Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Complete the budgeted income statement for the handisaw product for the first quarter. (Round direct material, direct labor and overhead costs per unit to 2 decimal places. Round final answers to the nearest dollar amount.) WESLEY POWER TOOLS Budgeted Income Statement For the Quarter Ending March January February $ 161,000 $ 189,000 51,106 59,994 $ March 217,000 6 8,882 1st Quarter Total $ 567,000 179,982 Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Sales Revenue Budgeted Cost of Goods Sold Budgeted Gross Profit Budgeted Selling and Administrative Expenses Budgeted Net Operating Income $ 83,234|$ 100,666 $ 118,098 $ 301,998 ( Required 2 Required 3 )
