Q2 MASTER BUDGET FOR MANUFACTURING PROBLEM 2 Barker Company produces and sells a single product with budgeted or standard costs as follows Inputs Standards Direct materials 10 lbs at $10 00 per pound Direct labor 8 hours at $12 50 per hour Factory overhead Variable Fixed 8 hours at $20 00 per hour 8 hours at $40 00 per hour Overhead rates are based on 8,000 standard direct labor hours per month, i e , this is the master budget denominator activity level Desired ending inventories of materials are based on 10 of the next months materials needed Desired ending finished goods are based on 5 of next periods budgeted unit sales Unit Sales are budgeted as follows January February March April 1,000 1,200 1,600 1,400 The budgeted sales price is $1000 per unit Sales are budgeted as 80 credit sales and 20 cash sales Past experience indicates that 60 of credit sales are collected during the month of sale, 38 are collected in the following month, and 2 are uncollectible A 1 cash discount is allowed to all customers (cash or credit) who pay within the month the sale takes place Selling and administrative expenses are Variable 20 of sales dollars, Fixed $250,000 per month The budget assumption concerning cash payment proportions is that all current purchases of direct material, direct labor, factory overhead and selling and admnistrative items will be paid for during the current period The beginning cash balance for February is $10,000 Depreciation and other non cash fixed costs are manufacturing $100,000, selling and administrative $75,000 REQUIRED A Partial Master Budget for February as follows 1 Sales budget for February, including net sales dollars 2 Calculate collections for February 3 Production Budget, i e , units to be produced for February 4 Direct Material quantity needed for production for February 5 Direct Material quantity to be purchased for February 6 Budgeted cost of direct material purchases for February 7 Budgeted cost of direct material used for February 8 Direct labor needed for production for February 9 Budgeted cost of direct labor used for February 10 Budgeted factory overhead costs for February 11 Budgeted cost of goods sold for February 12 Prepare a simple Budgeted Income Statement for February 13 Prepare a cash budget for February

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Q2. MASTER BUDGET FOR MANUFACTURING PROBLEM 2 Barker Company produces and sells a single product with budgeted or standard costs as follows: Inputs Standards Direct

Q2. MASTER BUDGET FOR MANUFACTURING PROBLEM 2 Barker Company produces and sells a single product with budgeted or standard costs as follows: Inputs Standards Direct materials 10 lbs at $10.00 per pound Direct labor 8 hours at $12.50 per hour Factory overhead: Variable Fixed 8 hours at $20.00 per hour 8 hours at $40.00 per hour Overhead rates are based on 8,000 standard direct labor hours per month, i.e., this is the master budget denominator activity level. Desired ending inventories of materials are based on 10% of the next months materials needed. Desired ending finished goods are based on 5% of next periods budgeted unit sales. Unit Sales are budgeted as follows: January February March April 1,000 1,200 1,600 1,400 The budgeted sales price is $1000 per unit. Sales are budgeted as 80% credit sales and 20% cash sales. Past experience indicates that 60% of credit sales are collected during the month of sale, 38% are collected in the following month, and 2% are uncollectible. A 1% cash discount is allowed to all customers (cash or credit) who pay within the month the sale takes place. Selling and administrative expenses are: Variable = 20% of sales dollars, Fixed = $250,000 per month. The budget assumption concerning cash payment proportions is that all current purchases of direct material, direct labor, factory overhead and selling and admnistrative items will be paid for during the current period. The beginning cash balance for February is $10,000. Depreciation and other non-cash fixed costs are: manufacturing = $100,000, selling and administrative = $75,000. REQUIRED: A Partial Master Budget for February as follows. 1. Sales budget for February, including net sales dollars. 2. Calculate collections for February. 3. Production Budget, i.e., units to be produced for February. 4. Direct Material quantity needed for production for February. 5. Direct Material quantity to be purchased for February. 6. Budgeted cost of direct material purchases for February. 7. Budgeted cost of direct material used for February. 8. Direct labor needed for production for February. 9. Budgeted cost of direct labor used for February. 10. Budgeted factory overhead costs for February. 11. Budgeted cost of goods sold for February. 12. Prepare a simple Budgeted Income Statement for February. 13. Prepare a cash budget for February.