Question
Please prepare budget for the quarter which consists of October, November and December. August 3000 unit September 3800 units October 4000 units November 4400 units
Please prepare budget for the quarter which consists of October, November and December.
August 3000 unit
September 3800 units
October 4000 units
November 4400 units
December 3600 units
January 4200 units
February 4100 units
Selling price is 50 per unit
A/R data: 20% of all sales are cash, the rest are credit
Of the credit sales --> Company collects 75% during the month of sale
20% the following month
5% the 2nd month following the sale
Data concerning goods inventory:
Goods Ending inventory on hand 25% of next month's budgeted unit sales PLUS 800 units
Data concerning Raw Materials:
6 lbs of material are required per unit of product
20% of the next month's needs of materials need to be on hand at the end of each month
$4.00 is the cost per lb of raw materials
Data concerning Direct Labor:
Each unit requires 0.8 hours of direct labor
Each DLH costs company $16
Management fully adjusts the workforce to the workload each month.
Data concerning Manufacturing OH and S&A Expenses:
VMOH is $3 per DLH
FMOH is $14,000 a month, including $6,000 depreciation
Variable selling and admin: $2
Fixed selling and admin: $10,000 a month, including $7,000 depreciation
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