Problems Group A P7-39A Preparing an operating budget-ales, production, direct maserals, 157 Learning Objective 3 labor, overhead, COGS, and S&A expense budgets The Huber Batting Company manufacrures wood baseball bats. Hube's two primary products are a youth bat.designed for children and young teDA, and 3. POHR S8 4, Adult bats COGS $60.690 adult bat, designed for high school and college-aged players. Huber sells he be wmb Sale sporting goods stores, and all sales are on account. The youth bat sellsor 5 adult bat sells for $65) Huber's highest sales volume is in the first thee monhs o the year as retailers prepare for the spring baseball season. Huber's balance shem December 31, 2016, follows HUBER BATTING COMPANY Balance Sheet December 31, 2016 Assets Cument Assets S 15,000 Cash 21,600 Accounts Receivable 12,000 Raw Materials Inventory 17,210 Finished Goods Inventory s 65,810 Total Current Assets Property, Plant, and Equipment Equipment 115,000 (20,000) 95,000 $ 160.810 Less: Accumulated Depreciation Total Assets Liabilities Current Liabilites $ 10,500 Accounts Payable Stockholders' Equity Common Stock, no par $130,000 Retained Earnings 20,310 Total Stockholders' Equity 150,310 Total Liabilities and Stockholders Equity $ 160,810 Other data for Huber Batting Company for the first quarter of 2017: a. Budgeted siles are 1,300 youth bats and 3,100 adult bats. b. Finished Goods Inventory on December 31 consists of 650 youth bats at $17 each and 440 adult bats at $14 each. c. Desired ending Finished Goods Inventory is 100 youth bats and 550 adult bats FIFO inventory costing method is used. d. Direct materials cost is $7 per youth bat and $9 per adult bat. e. Desired ending Raw Materials Inventory is $12,000 (indirect materials are insignificant and not considered for budgeting purposes). f. Each bat requires 0.5 hours of direct labor; direct labor costs average $15 per hour. Variable manufacturing overhead is $0.50 per bat. h. Fixed manufacturing overhead includes $600 per quarter in depreciation and $13,260 per quarter for other costs, such as insurance and property taxes. Master Buc i. Fixed selling and administrative expenses include $14,000 per quarter for salaries $3,000 per quarter for rent; $2,000 per quarter for insurance; and $300 per quarter for depreciation. iVariable selling and administrative expenses include supplies at 3% of sales. Requirements 1. Prepare Huber's sales budget for the first quarter of 2017. 2a 403. Prepare Huber's direct materials budget, direct labor budget, and manufacturing over- head budget for the first quarter of 2017. Round the predetermined overhead alloca- 2. Prepare Huber's production budget for the first quarter of 2017. tion rate to two decimal places. The overhead allocation base is direct labor hours. 4. Prepare Huber's cost of goods sold budget for the first quarter of 2017. 5. Prepare Huber's selling and administrative expense budget for the first - of 2017. quarter