The following information was provided by Hitchens widget store for July 31, 202X. They make two products: R2D2 & C3P0. Both items use 2 of the 3 listed materials: Nada, Yada, and Bozo.

Presented below is monthly sales data for the two balls

R2D2 C3P0

Expected unit sales 7,910 11,400

Expected price/unit $222 $142

Beginning product inventory 700 units 300 units

Desired ending product inventory 500 units 500 units

Direct materials - R2D2 uses Nada and C3P0 uses Yada for production. Both products require a Bozo.

Nada (R2D2 only) Yada (C3P0 only) Bozo (both products)

Material / unit 5.65ft 4.3 ft 1 unit

Beginning DM Inv. 9,600 ft 6,200 ft 450

Ending DM Inv 4,000 ft 8,000 ft 300

Costs are $3.65per foot of Nada

Costs are $2.47per foot of Yada

Bozos cost $7.85 each

Direct Labor - Each product requires the time listed below. R2D2 C3P0

Process #1 1.7hours/unit 1.1hour/unit Paid $13.60/hr

Process #2 2.5 hours/unit 1.5 hours/ unit Paid $18/hr

Factor Overhead is broken into variable and fixed costs. Variable costs are estimated by D.L hour of Process #1. Fixed Costs are divided based on percent of Process #1 hours (round to nearest tenth of a percent). Round dollar amounts to nearest dollar

Variable Fixed

Indirect Materials ($3.5/hr) Supervisor salary $97,000

Indirect Labor ($4.8/hr) Depreciation $59,400

Utilities ($2.75/hr) Property taxes and ins. $48,500

Other Selling and Admin Expenses not listed above

Advertising $162,330

Sales salaries 489,000

Office salaries 136,000

Income Tax percentage = 30%

Instructions:

Using the attached template fill-in sheet, complete all income statement budgets. Show all work for each budget

1. Sales budget Determine total sales for each item and the combined total.

2. Production budget Determine total units to be produced for each item and in total

3. Direct Materials budget Determine total feet and total cost of each material and in total.

4. Direct Labor budget Determine total hours and wage cost for each process and in total.

5. Factory O.H. budget Determine the total variable cost, total fixed cost and manufacturing rate/hour using the cost driver.

6. Determine the Cost of Goods Sold for each item and in total.

7. Prepare the budgeted income statement for July 31, 202X