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Vista Electronics, Inc., manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled

Vista Electronics, Inc., manufactures two different types of coils used in electric motors. In the fall of the current year, Erica Becker, the controller, compiled the following data.

  • Sales forecast for 20x0 (all units to be shipped in 20x0):
Product Units Price
Light coil 61,000 $ 310
Heavy coil 41,000 410
  • Raw-material prices and inventory levels:
Raw Material Expected Inventories, January 1, 20x0 Desired Inventories, December 31, 20x0 Anticipated Purchase Price
Sheet metal 39,000 lb. 43,000 lb. $ 14
Copper wire 36,000 lb. 39,000 lb. 8
Platform 6,100 units 7,100 units 4
  • Use of raw material:
Amount Used per Unit
Raw Material Light Coil Heavy Coil
Sheet metal 4 lb. 5 lb.
Copper wire 2 lb. 3 lb.
Platform 1 unit
  • Direct-labor requirements and rates:
Product Hours per Unit Rate per Hour
Light coil 4 $ 15
Heavy coil 6 20
  • Finished-goods inventories (in units):
Product Expected January 1, 20x0 Desired December 31, 20x0
Light coil 26,000 31,000
Heavy coil 7,000 8,000
  • Production overhead:
Overhead Cost Item Activity-Based Budget Rate
Purchasing and material handling $ 0.50 per pound of sheet metal and copper wire purchased
Depreciation, utilities, and inspection $ 6.00 per coil produced (either type)
Shipping $ 2.00 per coil shipped (either type)
General production overhead $ 4.00 per direct-labor hour

Problem 9-39 Part 1

Required: 1. Prepare the sales budget (in dollars) for 20x0. 2. Prepare the production budget (in units) for 20x0.

3. Prepare the raw material purchases budget (in quantities) for 20x0.

4. Prepare the raw material purchases budget (in dollars) for 20x0.

5. Prepare the direct-labor budget (in dollars) for 20x0.

6. Prepare the production-overhead budget (in dollars) for 20x0.

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