Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring hamess assemblies used in the production of semi-traller trucks. The wiring harness assemblies are sold to various truck manufacturers bround the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,600 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: a. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b. The data on materials used are as follows: Direct Material Per-Unit Usage Unit Cost Part K298 $4 Part eC30 Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next montn s production needs. This is exactly the amount of material on hand on January 1. c. The direct labor used per unit of output is ane and one-half hours. The average direct labor cost per hour is $20. d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Variable Cost Component Component Supplies $1.00 Power 0.20 Maintenance 12.600 1.10 Supervision 14,000 Depreciation 45.000 Omore Check My Work uses remaining A work saved. SLEinh Agmnt for Grading eBook Calculator Supervision 14,000 Depreciation 45,000 Taxes 4,300 Other 86,000 1.60 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 Commissions $1.40 Depreciation 25,000 Shipping 3.60 Other 137,000 1.60 The unit selling price of the wiring harness assembly is $110. 9. In February, the company plans to purchase land for future expansion. The land costs $68,000. h. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000, If a cash shortage develops, suficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 Increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: Prepare a monthly operating budget for the first quarter with the following schedules 1. Sales budget January February March Total Units 10,000 10,600 13,900 X 34,500 X Unit seling price 110 110 110 110 Sales 1,100,000 1,166,000V $ 1,529,000 X 3,795,000 X Omors Check My Work uses remaining All work saved. Somit Agenent for Gradng TCheck My Work See Comerstone 8.1. 2. Production budget January February March Total Unit sales 10,000V 10,600 13,900 34,500 Desired ending inventory 2,120 V 2,780 X 3,200 3,200 Total needed 12,100 X 13,380 X 17,100 x 37,700 X Less: Beginning 900 v 2,120V 2,780 X 900 Inventory Units produced 11,220 11,260 X 14,320 X 36,800 eBook Calculator See Comerstone B.2. 3. Direct materials purchases budget January February March Part K298 Part C30 Part K298 tart C30 Part K298 Part C30 Part K298 Units produced 11,220 11,220 11,260 X 11,260 X 14,320 X 14,320 X 36,800 X Dir. mat. per unit Production 22,440 33,660 22,520 X 33,780 x 28,640 X 42,960 73,600 X needs Desired El 6,756 X 10,134 X 8,592 X 12,888 X 9,900 14,850 V 9,900 Total needed 29,196 X 43,794 X 31,112 X 46,668 X 38,540 X 57,810 X 83,500 Less: B1 6,732 10,098 6,756 X 10,134 X 8,592 X 12,888 X 6,732 Dir. mat. te 22,464 X 33,696 X 24,356 X 36,534 X 29,948 X 44,922 76,768 purchase Cost per unit Total purchase 89,856 X 235,872 x 97,424 X 255,738 X 119,792 x 314,454 X 307,072 X cost Fendbeck Chek My Wark See Cormershene O more Check My Work uses emaining All work saved. ma srutor Submit Assignment for Grad s purchases budget January February March Total Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 Part K298 Part C30 11,220 11,220 11,260 X 11,260 X 14,320 X 14,320 X 36,800 X 36,800 X mit 22,440 V 33,660 V 22,520 X 33,780 X 28,640 X 42,960 x 73,600 x 110,400 x 6,756 X 10,134 X 8,592 X 12,888 X 9,900 14,850 V 9,900 14,850 ed 29,196 X 43,794 X 31,112 X 46,668 X 38,540 X 57,810 X 83,500 X 125,250 X 6,732 10,098 V 6,756 x 10,134 X 8,592 X 12,888 X 6,732 V 10,098 to 22,464 X 33,696 X 24,356 x 36,534 X 29,948 X 44,922 X 76,768 X 115,152 X it rchase 89,856 X 235,872 X 97,424 X $255,738 x $ 119,792 x 314,454 X 307,072 X $ 806,064 X Comerstone AX O more Check My Work uses remaning All work saved. Embfintructor Submit Asignment for Grading eBook Calculator 4. Direct labor budget. Round your answers to two decimal places, if required. January February March Total Units to be produced 11,220 11,260X 14,320 36,800 Direct labor time per unit 1.50 V 1.50 V 1.50 V 1.50 (hrs.) Total hours needed 16,830 16,890 21,480 55,200 X Wages per hour 20 V 20 20 20 Total direct labor cost 336,600 337,800 X 429,600 x 1,104,000 x Feedhach TOwo My Wok See Cormerstone 8.4. 5. Overhead budget. Round your answers to two decimal places, if required. January February March Yotal Budgeted direct 16,830 16,890 X 21,480 X 55,200 X labor hours Variable overhead 3.90 V 3.90 V 3.90V 3.90 rate Budgeted var. 65,637 65,871 X 83,772 X 215,280 X overhead O more Check My Work uses remainng All work saved. Satmit Asenme 5. Overhead budget. Round your answers to two decimal places, if required. January February March Total Budgeted direct 16,830 16,890 21,480 55,200 labor hours Variable overhead 3.90 3.90 3.90 V 3.90 rate Budgeted var. 65,637 65,871X 83,772 X 215,280 X overhead Budgeted fixed 161,900 V 161,900 V 161,900 485,700 V overhead Total overhead 227,537 227,771 X $245,672X $ 700,980 cost Feedbeck TCheck My Wo See Cornerstone 8.5. 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. 0 more Check My Work uses remaining Check My Work See Cornerstone 8.5. 6. Selling and administrative expense budget. Round your answers to the nearest cent, if required. January Fabruary March Total Planned sales 10,000 10,600 13,900X 34,500 Variable selling & administrative expense per 6.60 6.60 6.60 6.60 unit Total variable expense 66,000 69,960 91,740 227,700 Fixed selling 8& administrative expense: Salaries 8,600 88,600V 8,600 265,800 Depreciation 25,000 V 25,000 25,000 75,000 Other 137,000 V 137,000 137,000 411,000 Total fixed expenses 250,600 V $ 250,600 $ 250,600 V 751,800 Total selling & administrative expenses 316,600 V 320,560 $ 342,340X $ 979,500 X Feedbeck TCheck My WWock See Cornerstone 8.9. eBook A Calculator See Comerstone 8.9. 7. Ending finished goods inventory budget. Round intermediate calculations to the nearest cent. Round your answers to the nearest cent, if required. Unit cost computation: Direct materials: Part K298 8.00 Part C30 21.00 Direct labor 30.00 Overhead: Variable 5.85 Fixed 13.20 X Total unit cost 78.05 X Number of units 3,200 v Finished goods 2249,760. X Fe k Chea My See Comenstone B.6. 0 more Check My Work uses remaining 8. Cost of goods sold budget Direct materials used Part K298 294,400 X Part C30 772,800 X 1,067,200X Direct labor used 1,104,000 X Overhead 700,980 X Budgeted manufacturing 2,872,180 x costs Add: Beginning finished goods 70,245X Goods available for sale 2,942,425 x Less: Ending finished goods 249,760 Budgeted cost of goods 2,692,665 x sold Feedback Chack My Work See Cornerstone 8.7. 9. Budgeted income statement (ignore income taxes) Sales 3,795,000 X Less: Cost of goods sold 2,692,665 X Gross margin 1,102,335 X Less: Selling and administrative expense 979,500 x Income before income taxes 122,835 X eBook Calculator 10. Cash budget Enter a negative balance as a negative amount, and if an amount is zero enter "0". January February March Total Beginning balance 62,800 x 26,335 x 25,042 62,800X Cash receipts 1,100,000 1,166,000 1,529,000 x 3,795,000 x Total cash 1,162,800 X 1,192,335 x 1,554,042 X 3,857,800 available Disbursements: Purchases 325,728 x 353,162 X 434,246 X 1,113,136 X DL payroll 336,600 337,800 X 429,600 X 1,104,000 x Overhead 182,537 182,771 X 200,672 X 565,980 Marketing & admin 904,500 x 291,600 295,560 V 317,340 X Land 68,000 V 68,000 Total disbursements 1,136,465 X 1,237,293 X 1,381,858 X 3,755,616 X Ending balance 26,335 X -44,958 X 172,184 X 102,184 x Financing: Borrowed/repaid 70,000 X -70,000 x Interest paid -700 X -700 x 26,335 X 101,484 X Ending cash balance 25,042 X 101,484 X Fesbek (0 more Check My Wok uses remaining All work saved. Frnall initrurial Save and Submit Assignme New lab Chapter 8 Graded Problem Operating Budget, Comprehensive Analysis Ponderosa, Inc., produces wiring harness assemblies used in the production of semi-trailer trucks. The wiring harness assemblies are sold to various truck manufacturers around the world. Projected sales in units for the coming five months are given below. January 10,000 February 10,600 March 13,600 April 16,000 May 18,500 The following data pertain to production policies and manufacturing specifications followed by Ponderosa: a. Finished goods inventory on January 1 is 900 units. The desired ending invertory for each month is 20 percent of the next month's sales. Copyright 2002-2019 by Matris Software, lne. All nights resenved Chapter 8 Graded Problem a. Finished goods inventory on January 1 is 900 units. The desired ending inventory for each month is 20 percent of the next month's sales. b. The data on materials used are as follows: Direct Material Per Unit Usage Unit Cost Part K298 $4 Part C30 7. Inventory policy dictates that sufficient materials be on hand at the beginning of the month to satisfy 30 percent of the next month's production needs. This is exactly the amount of materal on hand on January 1. C. The direct labor used per unit of output is one and one-half hours. The average direct labor cost per hour is $20. d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Variable Cost Component Component Supplies $1.00 Copynght 2002-2019 by Matrix Software, inc. All rights reserved. 6. O NatGen P FAO NCJUA + Halifax S J8J Foremost z EZLynx JSA Travelers First Mutual Imported New Ta Chapter 8 Graded Problem d. Overhead each month is estimated using a flexible budget formula. (Activity is measured in direct labor hours.) Fixed Cost Variable Cost Component Component Supplies $1.00 Power 0.20 Maintenance 12,600 1.10 Supervision 14,000 Depreciation 45,000 Taxes 4,300 Other 86,000 1.60 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries 5 88.600 Chapter 8 Graded Problem Taxes Other 6,000 1.60 e. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Activity is measured in units sold.) Fixed Costs Variable Costs Salaries $ 88,600 Commissions $1.40 Depreciation 25,000 Shipping 3.60 Other 137,000 1.60 f. The unit selling price of the wiring hamess assembly is $110. a. In February, the company plans to purchase land for future expansion, The land costs $68,000. h. All sales and purchases are for cash. The cash balance on January i equals $62.900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month. as is the interest due. The interest rate is 12 Copynight 2002-2019 by Matrix Software, Inc. All nghts reserved. Chapter 8 Graded Problem h. All sales and purchases are for cash. The cash balance on January 1 equals $62,900. The firm wants to have an ending cash balance of at least $25,000. If a cash shortage develops, sufficient cash is borrowed to cover the shortage and provide the desired ending balance. Any cash borrowed must be borrowed in $1,000 increments and is repaid the following month, as is the interest due. The interest rate is 12 percent per annum. Required: me Prepare a monthly operating budget for the first quarter with the following schedules: as tie 1. Sales budget Jasuary February Harch Total hme Units 10,000 10,600 13,900 x 34,500 Unit selling price 110 110 110 110