Question
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. |
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