Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please answer question from 3 to 10 question first two already finish Grant Ltd operates at capacity and makes glass-topped dining tables. At the end

image text in transcribedimage text in transcribedimage text in transcribed

please answer question from 3 to 10 question first two already finish

Grant Ltd operates at capacity and makes glass-topped dining tables. At the end of 2018 Grant Ltd.'s management accountant gathered the following data to prepare budgets for the first six months 2019 1. Units sales per quarter and the selling price per unit are estimated as follows Unit sales 2,500 2,800 2,750 2,750 2,800 2,800 3,000 3,000 Price per unit S450 S450 S480 S480 $500 $500 $500 $500 January February March April Ma une July August Sales on November 2018 were 2,200 units and on December 2,400 units at a selling price of $450 20% of sales are cash sales and 80% are credit sales. From past experience, Grant Ltd collected 40% of credit sales within the month of sale, 30% in the following month and 25% in two months after the month of sale. Allowance for doubtful debts is 5% of credit sales (uncollectible) 2. The beginning inventories (BI) on 1 January 2019 and the desired ending inventories (EI) at the end of each month are as follows BI (1/1/19) EI (end of each month) Tables: 500 (at $300/unit) 20% of following month estimated sales Wood: 1,400 b.m. Glass 500 sheets 2090 sheets needed for next month's budgeted production (units) Materials and labour requirements Direct materials Wood: 2 board meters (b.m.) per table Glass: 1 sheet per table Direct manufacturing labour: 4 hours per table 25% bom needed for next month's budgeted production (units) 3. 4. Costs of direct materials and labour Wood: $16 per b.m. Glass: $22 per sheet Direct labour: $20 per labour-hour Direct materials are purchased in the month of production and are paid 50% in the month of purchase and 50% in the following month. Wages and salaries are paid monthly 5. 6. Variable g overhead is $28 per direct manufacturing labour-hour. There is also $209,000 in fixed manufacturing overhead costs per month. Fixed costs include S40,000 depreciation of factory equipment. The fixed manufacturing overhead rate is based on the number of units produced budgeted every six months, at the beginning of each semester, calculated dividing the budgeted fixed overhead costs by the budgeted number of units produced for the semester. Variable and fixed costs are paid in the month incurred. Sales commissions are paid monthly at the rate of 10% of month's sales revenue. There is $160,000 in fixed non-manufacturing costs (administrative expenses) budgeted per month including $20,000 depreciation costs of office equipment. Variable and fixed non manufacturing costs are paid in the month incurred. Grant Ltd has estimated the following payments in the first semester 2019 January: Loan for $40,000 plus interest payable at 31 December 2018 for S2,000 were paid on 2 January 2019 March: Dividends $100,000 May: Purchase of land $200,000 June: Purchase of equipment for $300,000 Grant Ltd maintain a 18% open line of credit for $80,000. Interests are paid at the end of each month. Grant Ltd maintains a minimum cash balance of $20,000. The company borrows on the first day of the month and repays loans on the last day of the month, both in multiples of $1,000 7. 8. 9. 10. Grant Ltd's balance sheet at 31 December 2018 is as follows ASSETS LIABILITIES Cash 32,000 Accounts payable 64,000 Accounts receivable, net Inventory: Wood Inventory: Glass Inventory: Finished goods150,000 Share capital Plant and equipment, net Total assets 673,200 Interest payable 22,400 Loan payable 11,000 2,000 40,000 SHAREHOLDER'S EQUITY 846,600 386,000 1,338,600 450,000 Retained eanings 1,338,600|Total Liabilities and Shareholder's equity (*): Accounts payable are 50% of direct materials purchased on December 2018 Required: Prepare a monthly master budget for Grant Ltd.'s for the first semester 2019. The following component budgets must be included: 1. Sales revenue budget 2. Production budget (in units) 3. Direct materials usage and purchases budget for each direct materials and total direct materials (in units and dollars) 4. Direct manufacturing labour budget 5. Manufacturing overhead budget 6. Manufacturing overhead rate for the semester 7. Ending finished goods inventory budget (unit cost and total cost) at June 2019 8. Selling and administrative expenses budget 9. Cash budget 10. Cost of goods sold at 30 June 2019 11. Budgeted income statement for the first semester 2019 12. Budgeted balance sheet as of 30 June 2019 (including separately the two direct materials inventory) Note. There is no beginning and ending balance of WIP in each month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Workbook/Study Guide To Accompany Managerial Accounting

Authors: Ray H Garrison, Eric Noreen, Peter C. Brewer

11th Edition

0072986131, 978-0072986136

More Books

Students also viewed these Accounting questions

Question

How did eBay pursue international growth?

Answered: 1 week ago

Question

What are the major trade-offs in a make-or-buy decision?

Answered: 1 week ago