Question
The following information applies to ALL parts of budgeting question. Woodruff Manufacturing produces a part used in the production of jet-boat engines. The following information
The following information applies to ALL parts of budgeting question.
Woodruff Manufacturing produces a part used in the production of jet-boat engines. The following information is gathered from the company records for preparing budgets for the 2nd Quarter ending 30 June 2021.
| (1) | Selected general ledger balances on 1 April 2021 | ||||||||||
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| Cash | $16,500 | |||||||||
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| Finished goods inventory (600 units) | $42,000 | |||||||||
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| Direct materials inventory (1200kgs) | $7,200 | |||||||||
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| Accountants receivable | $64,800 | |||||||||
| (2) | All sales are credit sales. Actual and projected sales from March 2021 to July 2021 are: | ||||||||||
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| March (actual) | 900 units | @180 = | $162,000 |
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| April (estimated) | 800 units | @180 = | $144,000 |
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| May (estimated) | 1,000 units | @180 = | $180,000 |
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| June (estimated) | 1,200 units | @180 = | $216,000 |
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| July (estimated) | 1,400 units | @180 = | $252,000 |
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| (3) | The desired ending finished goods inventory for each month is 75% of the next months sales. The desired direct materials ending inventory equivalent to 50% of next months sales requirement. | ||||||||||
| (4) | Variable product cost per unit |
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| Direct materials(Metal): 3kg @ 8 per kg | $24.00 |
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| Labour: 3 hours @ $15 per labour hour | $45.00 |
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| Variable overhead | $5.00 | $74.00 | ||||||||
| (5) | Monthly fixed costs | ||||||||||
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| Manufacturing (including depreciation $16,000) | $40,000 |
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| Administrative and selling | $32,000 |
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| (6) | Cash collections and disbursements |
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| The accountant projects 60% of the cash is collected in the month of sale and the balance is collected in the month following sale. | ||||||||||
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| All material purchases and other expenses are paid in the month in which they are incurred. | ||||||||||
Required: (a) Prepare production budgets in units for April, May and June, 2021.
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Research On Professional Responsibility And Ethics In Accounting Volume 24
Authors: Charles Richard Baker
1st Edition
180071758X, 9781800717589
