Problem 9-6 Jones Corporation has the following budgeted sales for the selected four-month period: Month Unit Sales July 20,000 August 35,000 September 25,000 October 30,000 Sales price per unit is $180 Plans are to have an inventory of finished product equal to 20 percent of the unit sales for the next month. There was 4,000 units in beginning inventory on July 1st. Three pounds of materials are required for each unit produced. Each pound of material costs $20. Inventory levels for materials equal 30 percent of the needs for the next Desired ending inventory for September is 25,200 pounds of material. Beginning inventory for July was 20,700 pounds of material. Each unit requires . 6 hours of direct labor and the average wage rate is $16 per hour. Variable overhead rate is $3.50 per direct labor hour. There is also fixed overhead of $22,000 per month The company pays a 3% commission on sales. Company has fixed selling and administrative expenses as follows: Rent $6,000/month Utilities 1,200/month Advertising 400/month Office Salaries 35,000/month Required: E. Prepare an overhead budget for July, August and September and in total for the quarter. Jones Corporation Overhead Budget July August September Total Labor hours x variable rate per hour $1 $ Total variable OH Fixed overhead Total overhead Feedback Check My Work Incorrect F. Prepare a selling and administrative expenses budget for July, August and September and in total for the quarter. Jones Corporation Selling and Administrative Budget July August September Total Variable selling expense Fixed expenses: Rent Utilities Advertising Office salaries Total G. Prepare an ending finished goods inventory budget for the quarter (Hint: you have already calculated the desired ending finished goods inventory quantity and assume a stable per unit rate). Round your answers to two decimals if necessary. Jones Corporation Ending Finished Goods Inventory Budget Desired ending inventory Direct materials $ Direct labor Overhead: Variable overhead Fixed overhead Unit cost H. Prepare a cost of goods sold budget for the quarter Jones Corporation Cost of goods sold Budget Direct materials Direct labor Overhead Add: Beginning inventory Goods available for sale Less: ending inventory Cost of goods sold I. Prepare a budged income statement for the quarter-the company falls into the 35 percent tax bracket for income taxes. Jones Corporation Budgeted Income Statement Sales Cost of goods sold $ Gross margin Less: Variable selling and administrative $ Fixed selling and administrative expenses Operating income Less: Income taxes Net income