Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The Huber Batting Company manufactures wood baseball bats. Huber's two primary products are a youth bat, designed for children and young teens, and an adult

The Huber Batting Company manufactures wood baseball bats. Huber's two primary products are a youth bat, designed for children and young teens, and an adult bat, designed for high school and college-aged players. Huber sells the bats to sporting goods stores and all sales are on account. The youth bat sells for $35; the adult bat sells for $50. Huber's highest sales volume is in the first three months of the year as retailers prepare for the spring baseball season. Huber's balance sheet for December 31, 2018, and other data for the first quarter of 2019follow:

Requirement 1. Prepare Huber's sales budget for the first quarter of 2019.

Huber Batting Company

Sales Budget

For the Quarter Ended March 31, 2019

Youth

Adult

Bats

Bats

Total

Budgeted bats to be sold

Sales price per unit

Total sales

Requirement 2. Prepare Huber's production budget for the first quarter of 2019.

Huber Batting Company

Production Budget

For the Quarter Ended March 31, 2019

Youth

Adult

Bats

Bats

Total

Plus:

Total bats needed

Less:

Budgeted bats to be produced

Requirement 3. Prepare Huber's direct materials budget, direct labor budget, and manufacturing overhead budget for the first quarter of 2019. Round the predetermined overhead allocation rate to two decimal places. The overhead allocation base is direct labor hours. Begin by preparing the direct materials budget.

Huber Batting Company

Direct Materials Budget

For the Quarter Ended March 31, 2019

Youth

Adult

Bats

Bats

Total

Direct materials per bat (ounces)

Direct materials needed for production

Plus:

Total direct materials needed

Less:

Budgeted purchases of direct materials

Direct materials cost per ounce

Budgeted cost of direct materials

Prepare the direct labor budget. (Enter any hours per unit amounts to two decimal places, X.XX.) Review the production budget you prepared above.

Data Table

Huber Batting Company

Balance Sheet

December 31, 2018

Assets

Current Assets:

Cash

$10,000

Accounts Receivable

20,300

Raw Materials Inventory

6,000

Finished Goods Inventory

22,650

Total Current Assets

$58,950

Property, Plant, and Equipment:

Equipment

120,000

Less: Accumulated Depreciation

(20,000)

100,000

Total Assets

$158,950

Liabilities

Current Liabilities:

Accounts Payable

$8,000

Stockholders' Equity

Common Stock, no par

$120,000

More Info

a.

Budgeted sales are 1,900 youth bats and 3,600 adult bats.

b.

Finished Goods Inventory on December 31, 2018, consists of 600 youth bats at $19 each and 750 adult bats at $15 each.

c.

Desired ending Finished Goods Inventory is 220 youth bats and 320 adultbats; FIFO inventory costing method is used.

d.

Direct materials requirements are 52 ounces of wood per youth bat and 54 ounces of wood per adult bat. The cost of wood is $0.20 per ounce.

e.

Raw Materials Inventory on December 31, 2018, consists of 30,000 ounces of wood at $0.20 per ounce.

f.

Desired ending Raw Materials Inventory is 30,000 ounces (indirect materials are insignificant and not considered for budgeting purposes).

g.

Each bat requires 0.5 hours of direct labor; direct labor costs average $15 per hour.

h.

Variable manufacturing overhead is $0.90 per bat.

i.

Fixed manufacturing overhead includes $400 per quarter in depreciation and $7,104 per quarter for other costs, such as insurance and property taxes.

j.

Fixed selling and administrative expenses include $11,000 per quarter forsalaries; $1,500 per quarter for rent; $1,500 per quarter for insurance; and $450 per quarter for depreciation.

k.

Variable selling and administrative expenses include supplies at 1% of sales.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Advanced Project Management A Structured Approach

Authors: Frederick Harrison, Dennis Lock

4th Edition

1138270636, 978-1138270633

More Books

Students also viewed these Accounting questions