Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me answer these two questions onBudgeted Income Statement Ash Creek Company is preparing its master budget for 2014. Relevant data pertaining to its

Please help me answer these two questions onBudgeted Income Statement

image text in transcribed Ash Creek Company is preparing its master budget for 2014. Relevant data pertaining to its sales, production, and direct materials budgets are as follows. Sales: Sales for the year are expected to total 1,000,000 units. Quarterly sales are 20%, 20%, 30%, and 30%, respectively. The sales price is expected to be $40 per unit for the first three quarters and $45 per unit beginning in the fourth quarter. Sales in the first quarter of 2015 are expected to be 20% higher than the budgeted sales for the first quarter of 2014. Production: Management desires to maintain the ending finished goods inventories at 25% of the next quarter's budgeted sales volume. Direct materials: Each unit requires 2 pounds of raw materials at a cost of $12 per pound. Management desires to maintain raw materials inventories at 10% of the next quarter's production requirements. Assume the production requirements for the first quarter of 2015 are 450,000 pounds. Ash Creek budgets 0.3 hours of direct labor per unit, labor costs at $15 per hour, and manufacturing overhead at $20 per direct labor hour. Its budgeted selling and administrative expenses for 2014 are $6,000,000. Question 1: Calculate the budgeted total unit cost. Total unit cost= $___________________ Question 2: Prepare the budgeted income statement for 2014. Word Bank: Operating Expenses Ending Inventory Total Operating Expenses Beginning Inventory Sales Income Before Income Taxes Purchases Income Tax Expense Cost of Goods Sold Net Income/(Loss) Gross Profit Selling and Administrative Expenses Income from Operators

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

Step: 3

blur-text-image

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

Taxation Of Individuals And Business Entities 2019 Edition

Authors: Brian C. Spilker, Benjamin C. Ayers, John Robinson, Edmund Outslay, Ronald G. Worsham, John A. Barrick, Connie Weaver

10th Edition

1259918394, 978-1259918391

Students also viewed these Accounting questions

Question

Were the participants sensitized by taking a pretest?

Answered: 1 week ago