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Exercise E9-10 Q3- Atlanta Company is preparing its manufacturing overhead budget for 2014. Relevant data consist of the following: Units to be produced (by quarters): 15,000;17,000;19,000 and 21,000 Direct labor: Time is 2.5 hours per unit. Variable overhead costs per direct labor hour: Indirect materials \$0.75 indirect labor $1.25 and maintenance $0.50 Instructions: Prepare the manufacturing overhead budget for the year, showing quarterly data. (b) Prepare budgeted income statements for each month in columnar form. Show in the statements the details cost of 1 GLENDO FARM SUPPLY COMPANY \begin{tabular}{|l|l|l|} \hline \multicolumn{1}{|c|}{ GLENDO FARM SUPPLY COMPANY } \\ \hline \multicolumn{1}{|c|}{ Direct Materials Budget - Gumm } \\ \hline \multicolumn{1}{|c|}{ For the Six Months Ending June 30,2014 } \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ GLENDO FARM SUPPLY COMPANY } \\ \hline \multicolumn{1}{|l|}{ Direct Labor Budget } \\ \hline For the Six Months Ending June 30, 2014 \\ \hline \end{tabular} Exercise E9-4 Q2- Turney Company produces and sells automobile batteries, the heavy-duty HD-240. The 2014 sales budget is as follows. The January 1, 2014, inventory of HD-240 is 2,500 units. Management desires an ending inventory each quarter equal to 30% of the next quarter's sales. Sales in the first quarter of 2015 are expected to be 20% higher than sales in the same quarter in 2014. Instructions: Prepare quarterly production budgets for quarter and in total for 2014. Exercise E9-2 Q1- Edington Electronics Inc. produces and sells two models of pocket calculators, XQ-103 and XQ104. The sell for calculators $20.00 and $30.00 respectively. Because of the intense competition Trusler faces, management budgets sales semiannually. Its projections for the first 2 quarters of 2014 are as follows. No changes in selling prices are anticipated. Instructions: Prepare a sales budget for the 2 quarters ending June 30, 2014. List the products and show for each quarter and for the 6 months, units, selling price, and total sales by product and in total. Problem P9-5A Q5- The budget committee of Litwin Company collects the following data for its San Miguel Store in preparing budgeted income statements for May and June 2014. 1. Sale for May are expected to be $1,000,000 Sales in June and July are expected to be 10% higher than the preceding month. 2. Cost of goods sold is expected to be 75% of sales. 3. Company policy is to maintain ending merchandise inventory at 25% of the following month's cost of goods sold. 4. Operating expenses are estimated to be: 5. Income taxes are estimated to be 30% of income from operations. Instructions: (a) Prepare the merchandise purchases budget for each month in columnar form. Problem P9-1A Q4- Glendo Farm Supply Company manufactures and sells a pesticide called Snare. The following data are available for preparing budgets for Snare for the first 2 quarters of 2014 . 1. Sales: Quarter 1, 25,000 bags; Quarter 2, 40,000 bags. Selling price is $50.00 per bag. 2. Direct materials: Each bag of Snare requires 5 pounds of Gumm at a cost of $4.00 per pound and 5 pounds of Tarr at $2.00 per pound. 3. Desired inventory levels: 4. Direct labor: Direct labor time is 0.25 hours ( 15 minutes) per bag at an hourly rate of $20.00 per hour. 5. Selling and administrative expenses are expected to be 15% of sales plus $200,000 per quarter. 6. Income taxes are expected to be 25% of income from operations. Your assistant has prepared two budgets: (1) The manufacturing overhead budget shows expected costs to be 150% of direct labor cost. (2) The direct materials budget for Tarr shows that cost of Tarr purchases to be $300,000 in quarter 1 and $450,000 in quarter 2. Instructions: Prepare the budgeted income statement for the first 6 months and all required operating budgets by quarters. (Note: Use variable and fixed in the selling and administrative expense budget) Do not prepare the manufacturing overhead budget or the direct materials budget for Tarr. \begin{tabular}{|l|l|} \hline \multicolumn{2}{|c|}{ GLENDO FARM SUPPLY COMPANY } \\ \hline \multicolumn{1}{|c|}{ Budgeted Income Statement } \\ \hline \multicolumn{1}{|c|}{ For the Six Months Ending June 30, 2014 } \\ \hline \multicolumn{1}{|c|}{6 Months } \\ \hline Sales & \\ \hline Cost of goods sold & \\ \hline Gross profit & \\ \hline Selling and administrative expenses & \\ \hline Income from operations & \\ \hline Income tax expense \\ \hline Net income \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline Cost element & Quantity & Unit Cost & Total \\ \hline Direct materials & & & \\ \hline Gumm (lbs.) & & \\ \hline Tarr (lbs.) & & & \\ \hline Direct labor (hrs.) & & & \\ \hline Manufacturing overhead & & \\ \hline Total & & \\ \hline \end{tabular}