The Tuscan Toy Company manufactures toy building block sets for children. Tuscan is planning for 2025 by developing a master budget by quarters. Tuscan's balance sheet for December 31, 2024, follows: Click the icon to view the balance sheet.) Other budget data for Tuscan Toy Company (Click the icon to view the other data.) Read the requirements. Requirement 1. Prepare Tuscan's operating budget and cash budget for 2025 by quarter. Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget, schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated based on direct labor hours. (Round all calculations to the nearest dollar) Begin by preparing the sales budget. Tuscan Toy Company Sales Budget For the Year Ended December 31, 2025 First Quarter Second Quarter Third Fourth Quarter Quarter Budgeted sets to be sold 900 Sales price per unit 4 70 $ 1,050 70 $ 1,200 70 $ 1,350 70 $ Total 4,500 70 $ Total sales 63.000 $ 73.500 $ 84,000 $ 94,500 $315,000 Prepare the production budget Beview the sales budget you prepared above. Tuscan Toy Company or Ask my instructor Production Budget Clear all Check answer counting FONO1 & FON03 able Tuscan Toy Company Balance Sheet December 31, 2024 Assets Current Assets Cash $ 10.000 Accounts Receivable 55,000 Raw Materials inventory 900 Finished Goods Inventory 4,350 $ 70,250 Total Current Assets Property, Plant, and Equipment Equipment Less: Accumulated Depreciation Total Assets Cument Liabilities Accounts Payable Ask my instructor 33 E Liabilities 199,000 (42.000) 157,000 227,250 Stockholders' Equity Print Done 80 000 F3 74 94 20 5 1 9 10.000 Current Assets: Cashi $ 10,000 Accounts Receivable 55,000 Raw Materials Inventory 900 Finished Goods Inventory 4,350 $ 70,250 Total Current Assets Property, Plant, and Equipment Equipment Less: Accumulated Depreciation Total Assets Current Liabilities: Liabilities 199,000 (42,000) 157,000 $ 227,250 Accounts Payable $ 10,000 Stockholders' Equity Common Stock, no par S 150,000 Retained Earnings 67,250 Total Stockholders' Equity 217,250 Total Liabilities and Stockholders' Equity 227,250 instructor Print Done 80 000 F3 F4 44 85 FS 6 7 8 F7 Comprehensi x erHomework.aspx?homeworkide642072357&questionids&fushedafalse&cid=7268811¢erwin-yes FONO1 & FON03 (Chapters 7- Question 1, CompM9-1 (similar to) HW Score: 2.6% More info (Unless otherwise noted, assume all of the following events occumed during 2024 and that any balances given are stated as of December 31, 2024) a. Budgeted sales are 900 sets for the first quarter and expected to increase by 150 sets per quarter. Cash sales are expected to be 30% of total sales, with the remaining 70% of sales on account. Sets are budgeted to sell for $70 pers b. Finished Goods Inventory on December 31, 2004, consists of 150 sets at $29 each c. Desired ending Finished Goods Inventory is 30% of the next quarter's sales; first quarter sales for 2026 are expected to be 1.500 sets FIFO inventory costing method is used. d. Raw Materials Inventory on December 31, 2024, consists of 900 pounds. Direct materials requirement is six pounds per set. The cost is $1 per pound Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2025, is 900 pounds; indirect materials are insignificant and not considered for budgeting purposes f. Each set requires 0.40 hours of direct labor direct labor costs average 10 per hour Variable manufacturing overhead is $4.00 per h. Feed manufacturing overhead includes $5.500 per quarter in depreciation and $11.300 per quarter f other costs, such as unities, insurance, and property L. Fixed selling and administrative expenses include $8.500 per quarter for salaries $5,400 per quarter for rent $1,950 per quarter for insurance and $500 per quarter for depreciation Variable selling and administrative expenses include supplies 2% of k. Capital expenditures include $30.000 for new manufacturing equipment, to be purchased and paid for in the first quarter L Cash receipts for sales on account are 50% in the quarter of the sale and 50% in the quarter following the sale Accounts Receivable balance on December 31, 2024, is expected to be received in the first quarter of 2005: uncollectible accounts are considered insignificant and not considered for budgeting purposes. tbs) instructor E " " FE 54 L 45 T 9 Print Done 57 A H 100 " U 8 More info e. Desired ending Raw Materials Inventory is 10% of the next quarter's direct materials needed for production; desired ending inventory for December 31, 2025, is 900 pounds; indirect materials are insignificant and not considered for budgeting purposes f. Each set requires 0.40 hours of direct labor, direct labor costs average 10 per hour g. Variable manufacturing overhead is $4.00 per set h. Fixed manufacturing overhead includes $5,500 per quarter in depreciation and $11,300 per quarter fo other costs, such as utilities, insurance, and property taxes 1. Fixed selling and administrative expenses include $8,500 per quarter for salaries; $5,400 per quarter for rent $1,950 per quarter for insurance and $500 per quarter for depreciation Variable selling and administrative expenses include supplies at 2% of sales k. Capital expenditures include $30,000 for new manufacturing equipment, to be purchased and paid for in the first quarter. L Cash receipts for sales on account are 50% in the quarter of the sale and 50% in the quarter following the sale: Accounts Receivable balance on December 31, 2024, is expected to be received in the first quarter of 2025; uncollectible accounts are considered insignificant and not considered for budgeting purposes m. Direct materials purchases are paid 70% in the quarter purchased and 30% in the following quarter Accounts Payable balance on December 31, 2024, is expected to be paid in the first quarter of 2025 Direct labor, manufacturing overhead, and selling and administrative costs are paid in the quarter incurred o. Income tax expense is projected at $2,500 per quarter and is paid in the quarter incurred. p. Tuscan desires to maintain a minimum cash balance of $35,000 and borrows from the local bank as needed in increments of $1,000 at the beginning of the quarter; principal repayments are made at the beginning of the quarter when excess funds are available and in increments of $1,000, interest is 6% per year and paid at the beginning of the quarter based on the amount outstanding from the previous Quarr structor 34 Priet Done 75 35 20 L 6. 96 8: 0G 29 DA DO "O 88 T Y U G H 61 1 Q A C V B N M work Camprehens x PlayerHomework.aspir homeworkid 6420723576questionid 12688116centerwinayes ing FOND1 & FON03 lem (Chapters 7- Question 1, CompM9-1 (similar to) HW Score: 2.6 Requirements ick t budg ick the t ireme budge dachu by p 1. Prepare Tuscan's operating budget and cash budget for 2025 by quarter Required schedules and budgets include: sales budget, production budget, direct materials budget, direct labor budget, manufacturing overhead budget, cost of goods sold budget, selling and administrative expense budget schedule of cash receipts, schedule of cash payments, and cash budget. Manufacturing overhead costs are allocated besed on direct labor hours Round all calculations to the nearest dollar) 2. Prepare Tuscan's annual financial budget for 2025, including budgeted income statement and budgeted balance sheet 3. Tuscan sold 4,600 sets in 2025, and to actual operating income was as follows Tuscan Tay Company Income Statement For the Year Ended December 31, 2025 NSR Cost of Goods Sold + Variabl Fixed Gross Proft geted Selling and Administrave Expenses Vabl as price Ti my instructor 6 Operating Income Other income and Expres 54 DC L D LL 55 T S 322,000 56.200 86.200 132.400 589.000 540 85.400 71M0 117,710 Print Done 9 9 147 H U 8 g: DR " DP " Homework.aspx?homeworkid=6420723576questionid=18flushed=false&cid=7268811centerwin-yes ONO1 & FON03 (Chapters 7- Question 1, CompM9-1 (similar to) HW Score: 2.6%, 2 X Requirements Prepare a flexible budget performance report through operating income for 2025. Show product costs separately from selling and administrative costs. To simplify the calculations due to sets in beginning inventory having a different cost than those produced and sold in 2025, assume the following product costs: Static budget Flexible budget Variable Fixed Total $ 58.950 $ 67,200 $ 125.150 65,400 67,200- 132,600 4. What was the effect on Tuncan's operating income of selling 100 sets more than the static budget level of sales? 5. What is Tuscan's static budget variance for operating income? 6. Explain why the flexible budget performance report provides more useful information to Tuscan managers than the static budget performance report. What insights can Tuscan's managers draw from this performance report? 7. During 2025, Tuscan recorded the following cost des below Compute the cost and efficiency variances for direct materials and direct labor Standard Cost Information structor Cost Direct materials Direct labor Variable manufacturing overhead 0.40 Fixed manufacturing overhead Static 0.40 hours p budget amount 147.200 $1 per pound $10 per hour $10 per hour $30.00 per hour 80 888 53 C ON L 93 T Print Done 813 8: 427 96 1 A G B H N 22 1 9 M DO Y C lem (Chapters 7- Question 1, CompM9-1 (similar to) HW Score ca ck ( udg Requirements ck t Direct materials he t Direct labor Quantity pounds per set Cost $1 per pound 040 hours per se $10 per hour 0.40 hours per se $10 per hour $35.00 per hour Variable manufacturing overhead Fixed manufacturing overhead Static 0.40 hours per set budget amount: $67,200 reme Budge actur Actual Cost Information Direct materials (27400 pounds @$1.30 per pound) S 35,620 Direct labor by p Variable manufacturing overhead (1.800 hours (1.800 hours $10.60 per hour) 19,080 $8.50 per hour) 17,100 Fixed manufacturing overhead 66,200 pric sales pare the 8. For manufacturing overhead, compute the variable overhead cost and efficiency variances and the fixed overhead cost and volume variances 9. Prepare the standard cost income statement for 2005 10. Calculate Tuscan's ROI for 2025. To calculate average total assets, use the December 31, 2024, balance sheet for the beginning balance and the budgeted balance sheet for December 31, 2025, for the ending balance Round all of your answers to four decimal places 11. Calculate Tuscan's profit margin radio for 2025 Int your results 12. Calculate Tuscar's asset Sumover ratio for 2025 pt your results 13. Use the expanded ROI formula to contim your results from Requirement 10. Interpret your results 14. Tuscan's management has specified a 10% target rate of tum Calculate Tuscan for 2025 Interpret your results y instructor : E D 868 20 R 5 93 L Print Done 9 9 8: 28 gt Y U B H DO C B N M O